Next eyes £100m bid for retail rival

Enderby retail giant Next is preparing a bid for clothing brand FatFace in a deal reported to be worth more than £100m.

Sky News says Next is finalising a deal for FatFace, just three years after it was bought by its lenders.

The deal could be announced before the weekend.

FatFace has around 180 UK stores, and, if the deal goes through, will become the latest addition to Next’s portfolio.

Next recently upped its stake in Reiss to reaffirm its position as the brand’s majority shareholder.

Next has also recently bought online furniture retailer, Made.com, out of administration; stricken Cath Kidston and baby clothing outlet JoJo Maman Bebe.

Alice Price, apparel analyst at GlobalData, the data and analytics company, said: “An acquisition of FatFace by Next, which is reportedly close to being confirmed for more than £100m, would be a financially sound investment. Sales at FatFace rose by 15% to reach £282m in the year to 27 May 2023, significantly beyond pre-pandemic levels, meaning it should generate immediate returns for Next without the need for significant additional resources. Next is also focused on strengthening its mid to upper-priced brand offering, as it recognises consumers are prioritising higher quality products to achieve better value for money during the cost-of-living crisis, so FatFace’s market positioning should help it achieve this goal.

“Having Next as its owner would also benefit FatFace and bolster its growth potential, with its launch on Next’s Platform Plus earlier this year, where Next fulfils orders from its third-party brands’ own warehouses within two days, already enabling the brand to increase its customer base. Next’s superior online proposition and global reach will also allow FatFace to expand internationally, which has been a focus for the brand recently, with North America accounting for 7% of its sales and growing 20% in its FY2022/23.”