Next Bolsters Control of Reiss with £128 Million Investment

Next has significantly strengthened its ownership in the esteemed fashion label Reiss by acquiring a substantial stake from its co-owner, the American investment firm Warburg Pincus.

In a substantial transaction valued at £128 million ($162 million), Next has expanded its ownership share from 51% to a commanding 72%. Concurrently, the Reiss family’s interest in the business will increase to 22%, with Reiss management retaining the remaining shares.

Next has been strategically active in recent years, often opting to collaborate with brand founders while acquiring ownership. Notably, its acquisition of Joules involved a strategic partnership with Tom Joule to secure the brand.

In addition to its heightened involvement with Reiss, Next holds sway over other prominent brands like Cath Kidston and JoJo Maman Bébé. Both Next’s proprietary brand operations and the labels it has acquired, whether through ownership or licensing, have been delivering robust performances, leading to a recent upward revision of its profit outlook.

Reiss, a prestigious fashion label founded by David Reiss in 1971, came under the purview of Warburg Pincus in 2016, with its founder maintaining a minority stake. Next entered the Reiss narrative in 2021, initially acquiring a 25% stake, setting the stage for future acquisitions.

Earlier this summer, there were speculations regarding a potential sale of Reiss. Nevertheless, indications from a senior retail executive suggested that Next might be interested in establishing a market price and subsequently acquiring Warburg Pincus’s remaining interest. Evidently, this strategic perspective has been validated. It’s a logical step given Reiss’s sustained profitable growth trajectory and substantial untapped expansion opportunities.