UK-based clothing retailer NEXT has entered into an agreement to purchase Warburg Pincus' entire 34% stake in Reiss fashion house.
Under the terms of the agreement, NEXT will acquire the interest for a total consideration of £128m ($161.10m) on a fully diluted basis.
The two parties signed binding agreements on 21 August 2023.
Upon completion of the deal, NEXT will increase its interest in the Reiss business from 51% to 72% while the stakes of the Reiss family and the Reiss management team will be 22% and 6%, respectively.
With a presence in more than 18 countries and 266 points of sale, the fashion brand achieved total sales of £324.6m in the year to 28 January 2023, up 26.4% compared to the prior year.
The brand’s profit before tax in the same period also increased by 50.5% to £51.6m over the year.
The deal is subject to the satisfaction of customary closing conditions, including regulatory approvals and is expected to close in mid-October 2023.
Reiss's results will be consolidated into NEXT's accounts after completion.
NEXT expects the transition to have no material impact on its underlying profit before tax or EPS in the current year.
NEXT chief executive Simon Wolfson said: "Reiss has performed exceptionally well since we first invested in March 2021. This success has been driven by the strength of its brand, first class management and the benefits of Total Platform; we look forward to continuing to develop the business with Christos and the Reiss team. Warburg Pincus has been an excellent partner throughout the term of our investment and we have enjoyed working with them during the last two years."
Following the deal, Reiss will continue to be headquartered in London under the leadership of its current CEO Christos Angelides. The brand will also retain its own Board of Directors.
In addition, Reiss' management will retain autonomy and creative independence.
The brand’s websites and online operations, in the UK and overseas, will remain contracted to NEXT's Total Platform.
Christos Angelides said: "We look forward to continuing to focus on creating authentic and timeless collections for our customers and over the next few months we will be launching a number of new initiatives that will both expand the breadth and choice of our collections worldwide."
