NEXT acquires £33m stake in Reiss

NEXT has acquired a 25 per cent equity stake in fashion retailer Reiss in a deal worth £33m.

As part of the strategic partnership, which is subject to regulatory approval, NEXT has an option to acquire an additional 26 per cent interest at pre-agreed terms which, if exercised, would take NEXT’s holding in the company to 51 per cent.

The deal values Reiss at around £200 million, said Warburg Pincus, the private equity owner which bought a majority stake in Reiss in 2016, with the Reiss family maintaining a minority holding.

Reiss achieved turnover of £227.4m through all its sales channels in the year to February 2020, an increase of 22 per cent on the prior year. The company currently operates in 14 countries from 79 stores, 104 concessions and via wholesale and franchises.

The fashion brand was originally founded in 1971 by David Reiss as a menswear brand, but has since evolved into an ‘affordable luxury apparel brand’ for both men and women.

Under the terms of the investment, Reiss’s websites and online operations, both in the UK and overseas, will be contracted to NEXT through NEXT’s Total Platform.

Total Platform will also provide warehousing and distribution services for Reiss’s retail, franchise, wholesale and concession businesses, all of which will continue to be operated by Reiss.

It is anticipated Reiss will go live on NEXT’s Total Platform in February 2022.

The intention is that NEXT’s infrastructure - including its online systems, warehousing, distribution assets and sourcing base - can serve as a launch pad for Reiss’s growth plans, both in the UK, and overseas, NEXT said in a statement.

Under the terms of the deal, Christos Angelides will remain chief executive of Reiss. Angelides previously worked for NEXT for 28 years, serving 14 years on the NEXT plc board as group product director.

NEXT said that Reiss will retain its management autonomy and creative independence following the investment, with its own independent board of directors, and will continue to be headquartered in london.

Simon Wolfson, NEXT chief executive said: “Reiss is an outstanding brand with enormous potential and a first class management team. We are excited to see what can be achieved through the combination of Reiss’s exceptional product, marketing and brand building skills with NEXT’s Total Platform infrastructure.”

Christos Angelides, Reiss chief executive said: “I believe the partnership with NEXT will be transformational for Reiss’s operational effectiveness. NEXT’s infrastructure will ensure Reiss is not only more efficient as a business but more effective at serving its customers directly through Reiss stores, at and through its worldwide partners.

"Whilst we will continue to focus on creating authentic and timeless collections, today’s announcement provides a great opportunity for Reiss to realise the Brand’s global potential as a modern fashion house.”

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