The high-end fashion chain, Reiss, is reportedly up for sale, and retail giant Next is considering increasing its stake in the company. Next, currently the largest shareholder in Reiss, is said to be exploring a potential sale to establish the company’s value and potentially acquire a larger stake.
The auction of Reiss, led by Sky News and fellow shareholder Warburg Pincus, could value the fashion chain at £500 million. Founded by David Reiss in 1971, Reiss has established itself as a prominent player in the premium fashion market in the UK. The auction is currently in its second round, with several potential buyers expressing interest.
Unlike other recent sales in the UK fashion sector, Reiss is not a struggling or underperforming company. The estimated valuation of £500 million is based on the expected profits of nearly £65 million for the current financial year. This raises questions about why Next, known for its acquisitive nature, would want to sell. However, a source close to Next has cast doubt on the possibility of the company selling its 51% stake.
According to a senior retail executive, Next may be seeking to establish a market price for Reiss and potentially acquire Warburg Pincus’s remaining stake in the company. The ongoing auction process is inviting offers for the entire business, but it remains unclear whether Next will purchase its partner’s holding or retain its stake alongside a new investor.
Next has a history of acquiring businesses, representing brands like Victoria’s Secret and Gap in the UK, and acquiring JoJo Maman Bebe and Joules. The company’s strong financial position allows it to make acquisitions without taking on significant debt. Next initially acquired a 25% stake in Reiss from Warburg Pincus in 2021 and exercised its right to buy a majority holding the following year.
Reiss operates its online business through the Next Total Platform and has over 60 stores in the UK. The company also has plans to expand its small chain of seven stores in the US. No comments have been made by any of the parties involved in the sale.
Sources:
1. Sky News
2. Retail Gazette
