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3 Sep

Next to Increase Stake in Reiss to 72 Percent

Next to Increase Stake in Reiss to 72 Percent

LONDON — British high-street retailer Next on Friday revealed that it and the Reiss family have agreed to accumulate all of personal equity firm Warburg Pincus’ 34 percent interest within the Reiss Group for 128 million kilos.

The transaction, which is anticipated to happen in mid-October, would see Next’s holding within the brand go up from 51 to 72 percent. Meanwhile, the Reiss family’s share will increase to 22 percent, with the remaining 6 percent held by the Reiss management team. Warburg Pincus acquired a majority stake from the Reiss family in May 2016.

Next said the deal wouldn’t contribute to the underlying profitability of the group, but there could be a non-recurring, non-cash, exceptional gain in its accounts within the period.

The British high-street giant, which operates a series of physical stores and has been transforming itself into an internet platform for third-party brands within the vein of Amazon, took a 25 percent stake in its rival Reiss back in 2021 because it seeks to pump up its online portfolio of fashion, lifestyle and sweetness brands.

Under the terms of that agreement, Next exercised the choice to accumulate a further 26 percent interest in Reiss at pre-agreed terms before July 2022, and have become the bulk shareholder.

The corporate said further investment in Reiss follows a period of continued growth for the brand under the leadership of its chief executive officer Christos Angelides, who was appointed to the role in 2017.

Within the 12 months to Jan. 28, Reiss had total sales of 324.6 million kilos, up 26.4 percent year-over-year. Profit before tax within the period was 51.6 million kilos, a 50.5 percent jump in comparison with the prior 12 months.

In a bid to woo a more sophisticated demographic, Reiss earlier this week unveiled its premium line, Atelier. The name of the road is an homage to the in-house team of designers at Reiss, who’ve all held positions at luxury fashion labels.

The Atelier collection, which is ready to launch online and in select stores on Sept. 13, comes with a powerful tailoring focus and uses a neutral color palette with silk, Italian wool and cashmere-blend fabrications. The value point of the Atelier line will probably be two to 3 times higher than the essential collections at Reiss, which start at around 150 kilos.

In recent times the brand has turn out to be a royal fixture with the likes of Kate Middleton and Meghan Markle. It has also recently turn out to be the official travel partner for the McLaren Racing Formula 1 team.

Simon Wolfson, CEO of Next, said the success of Reiss under the brand new ownership “has been driven by the strength of its brand, first-class management, and the advantages of Total Platform,” which is Next’s suite of online services for third-party sellers.

Angelides added: “We’re appreciative of the wonderful partnership with Warburg Pincus over the past seven years. Their expertise has been instrumental to our sustained development they usually have been a powerful and trusted partner. We look ahead to continuing to deal with creating authentic and timeless collections for our customers and over the subsequent few months, we will probably be launching numerous recent initiatives that may each expand the breadth and alternative of our collections worldwide.”

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