New Look Changes Hands In Brait Buyout
A South African billionaire has become one of the biggest players on the British high street by taking control of New Look in a deal valuing the fashion retailer at £1.9bn.
As Sky News exclusively revealed on Thursday night, Brait, the private equity vehicle of Christo Wiese, said it had reached an agreement with New Look’s shareholders.
Brait said it was buying a 90% stake for £780m, marking New Look’s first change of ownership in more than a decade.
The deal meant Apax and Permira, which bought the chain in 2004, abandoning exploratory plans for a flotation of the business.
Mr Wiese has been linked with a string of UK retail takeovers in recent years, including a bid for BhS, formerly owned by Sir Philip Green.
He is in the process of launching Pep & Co, a new chain, with Andy Bond, the previous boss of Asda.
His takeover of New Look follows a deal for Brait to buy Virgin Active, the health and fitness chain, in a deal valued at around £700m.
It will underline the continuing attractiveness of the British high street to foreign investors, even as consumers increasingly shift their spending online.
New Look operates more than 800 stores in 21 countries around the world, and is the UK’s second-biggest women’s value clothing and accessories retailer, according to Kantar Worldpanel, a research firm.
Other bidders for the company had included a joint offer between CDH, a Chinese buyout firm, and Clayton Dubilier & Rice, the group where ex-Tesco boss Sir Terry Leahy is an adviser.
Apax and Permira had recruited JP Morgan, the Wall Street bank, to work on a stock market listing that could value it at as much as £2bn.
Goldman Sachs acted for New Look’s shareholders on the sale discussions.
In 2010, Apax and Permira were forced to abort a flotation amid challenging markets.
During the intervening period, New Look’s debt position had rendered a listing not viable.
Its founder, Tom Singh, also remains a shareholder and is expected to retain his interest once the Brait takeover completes.
According to third-quarter financial results released in February, New Look saw like-for-like sales in the UK decline by 1%, a dip that it attributed to unseasonably warm weather.
The company is continuing to expand internationally, as well as attempting to grow its menswear business.
It now has nearly 20 shops in China although it retreated from Russia and Ukraine because of continuing instability in the two countries.
Anders Kristiansen, its chief executive, described New Look’s trading performance as “robust… against a challenging backdrop”.
“It was a record online sales performance over the Christmas period with all channels well-prepared for peaks in demand around Black Friday, Cyber Monday and Boxing Day, whilst our high street presence came into its own as we handled a surge in demand for our Click & Collect and Order in Store offerings,” he said.