Brait buys 90% of New Look in £780m deal, its second UK grab in a month
What's the deal? BraitDealroom has a profile for this one. Try Dealroom →, the investment firm controlled by South African billionaire Christo Wiese, has agreed to pay £780m for a 90% stake in UK fashion retailer New LookDealroom has a profile for this one. Try Dealroom →. Founder Tom Singh, who owns 22% of the business, will cash in most of his holding but keep a stake. The deal values New Look at £1.9bn including debt.
What each side brings: New Look, founded in 1969 in Taunton, Somerset, runs 569 stores in the UK and 200 more across Europe, China, Africa, the Middle East, and Asia. Brait is Wiese's vehicle for retail bets. He built a fortune estimated at $7bn through ShopriteDealroom has a profile for this one. Try Dealroom → and Pepkor, which operates 3,700 clothing stores worldwide.
Why now? Private equity owners Apax and PermiraDealroom has a profile for this one. Try Dealroom → had been eager to sell after 11 years. Retail analyst Nick Bubb said an IPO "had never looked feasible" given New Look's "chequered UK history and unproven Chinese potential."
What's the endgame? Chief executive Anders Kristiansen, who stays on, said Brait supported his strategy of international expansion, higher online sales, and new lines like cosmetics and menswear. New Look aimed to open more than 50 additional stores in China by April 2016.
What could go wrong? New Look's UK performance has been mixed. In the final three months of 2014, like-for-like sales fell 1%, though online sales rose by a third. The retailer withdrew from Russia and sold its French budget chain Mim.
The signal: The purchase is Brait's second big UK move in a month, following its £682m buy of Sir Richard Branson's 80% stake in Virgin Active. It also sets up a clash: New Look will now compete directly with Pep & Co, a separate fashion venture backed by Wiese.
Read more: BritBrief
Image credit: stevecadman
