Next adds Fat Face to stable of brands for £115mn

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Next is adding fashion retailer Fat Face to its burgeoning stable of brands in a £115mn deal, the company said on Friday.

The UK high street bellwether has been on an acquisition spree recently, having bought online furniture seller Made.com; Cath Kidston, a brand known for its floral patterns; and baby and maternity specialist Jojo Maman Bébé.

Fat Face, whose dresses and shirts have been sold on Next’s website since 2016, will retain its management autonomy and creative independence, the FTSE 100 company said in a statement. Will Crumbie, who joined Fat Face as chief financial officer in 2014 and became chief executive in 2021, will continue to lead the business.

Fat Face recorded sales of £282mn in the year to May 2023, while profit before tax was £19.5mn.

Next, which has been run by Lord Simon Wolfson for more than two decades, said the deal should complete in the next few weeks and it will not materially impact its underlying profits this financial year.

The transaction will be settled partly in cash and partly by the issue of new Next shares and management equity rolling over into the new structure.

Next’s shares closed down 1.07 per cent at 6,854p.

It was one of the first major retailers to start selling third-party brands at scale through its Label division almost a decade ago — a move that has been replicated by rivals including Marks and Spencer. John Lewis has also been adding more brands to its offering recently.

Wolfson believes that giving customers more choice will prevent them from defecting to competitors.

Fat Face, whose name was inspired by the black mountain ski run in France’s Val d’Isère, La Face, was founded by Jules Leaver and Tim Slade in 1988.

They began printing sweatshirts and T-shirts to sell at night and they skied during the day. They grew the brand and opened their first shop in 1993 on London’s Fulham Road.

But Fat Face has not had the smoothest journey in recent years after lenders took over in 2020 as it had to grapple with shuttered stores during lockdown.

The chain was bought by Bridgepoint, the private equity firm, in 2007 for £360mn from Advent International, another private firm.