The fashion industry is abuzz with the official announcement: Next is poised to take the reins of FatFace. This exciting development, unveiled on Friday, reveals that Next has inked a deal to acquire FatFace for a substantial equity value of £115.2 million. This strategic move holds the potential to reshape the landscape of both brands.
The finalization of this acquisition is anticipated in the coming weeks, signaling Next’s acquisition of a dominant 97% ownership stake in FatFace, while the existing management retains a 3% share in the company. Under the stewardship of CEO Will Crumbie, who assumed this role in 2021 after joining as CFO in 2014, the brand’s journey continues.
The structure of this acquisition combines various elements, with Next utilizing a mix of cash, the issuance of new Next shares, and the roll-over of management equity into the revamped ownership structure. Furthermore, management will actively participate in a performance-related equity scheme, aligning their interests with the future prosperity of the brand.
True to its track record, Next is committed to preserving FatFace’s cherished attributes, including management autonomy and creative independence. The brand will maintain its distinct board of directors and its headquarters will remain in Havant, Hampshire, preserving its unique identity rather than merging with the Next headquarters.
The roots of Next’s association with FatFace trace back to 2016 when it assumed the role of a Label brand, retailing on next.co.uk. Over the upcoming year, strategic plans are in place to transition FatFace’s online operations to Next’s Total Platform, promising to unlock synergies for enhanced performance and service.
This acquisition underscores FatFace’s commendable resilience and strength, as it emerges from recent periods with robust sales and profit recovery. In the year leading up to May 27, FatFace achieved a commendable total sales figure of £282 million, showcasing substantial growth compared to the previous year’s revenue of £234.8 million. The latest period also reported a noteworthy statutory profit before tax, amounting to £19.5 million.
As Next and FatFace unite forces, this marks the commencement of an exciting new chapter in their respective journeys, promising a bright future and a world of opportunities.