In order to increase its control over the British fashion label Reiss, Next Plc paid US investment company Warburg Pincus £128 million ($162 million) for a 34% stake in the company.
The fashion and home goods retailer’s ownership will increase to 72% from 51%, while the founding Reiss family’s stake will increase to 22% of the company.
The transaction is anticipated to occur in October. The remaining will be held by Reiss management.
After the transaction’s anticipated conclusion in the middle of October, Next’s ownership of Reiss will rise from 51% to 72%.
The management team and Reiss family will each own 6% and 22% of the company’s shares, respectively. In 2021, Next initially acquired a 25% share in Reiss.
The announcement comes after Reiss experienced rapid expansion under the direction of company CEO, Christos Angelides.
Acquire Warburg Pincus Stake
The company raised pre-tax profit by 50.5% to £51.6 million and total revenues by 26.4% to £324.6 million in the year ending on January 28, 2023.
After the acquisition, Angelides, who was appointed chief executive in 2017, will continue in that capacity. Prior to that, he spent 28 years working for Next, 14 of those years as group product director on the Next board.
Reiss will continue to have its own board of Acquire Warburg Pincus Stake directors after the deal. its management will continue to operate independently, with its headquarters in London.
However, under Next’s Whole Platform, which went live in February 2022. Its websites and online activities will continue to be under contract with Next.
Next, it stated that Reiss’ expansion had used the platform as a springboard.
“Reiss has fared extraordinarily well since we acquired it. Warburg Pincus Stake first invested in March 2021,” Next CEO Simon Wolfson remarked.
The power of its brand, top-notch management, and the advantages of Total Platform have all contributed to its success.
We look forward to working with Christos and the Reiss team to grow the company even further. Over the course of our investment. Warburg Pincus has been a great partner, and we have enjoyed our collaboration with them.
“We look forward to continuing to focus on developing authentic and timeless collections for our clients,” Angelides continued.
“And over the next several months we will be introducing a number of new projects. That will both enhance the range and choice of our collections internationally.”