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New Look sold in £1.9bn deal

New Look has been bought by South African billionaire Christo Wiese in a deal that values Britain’s second-largest women’s clothing retailer at £1.9bn.

Private equity firm Brait, which is owned by Wiese, has announced that it has reached agreement with New Look shareholders to acquire a 90% stake in the business.

The family of New Look founder, Tom Singh, and the current management of the company will be reinvesting to acquire the remaining 10%.

New Look, which operates more than 800 stores worldwide, 569 of which are in the UK, has financial debt of £1bn. A statement confirming the deal said the company will review financing alternatives, subject to market conditions.

Current chief executive Anders Kristiansen, chief financial officer Mike Iddon, and chief commercial officer Roger Wightman will remain with the company.

The deal brings to an end New Look’s plans for a stock market flotation. The business has geared up for an initial public offering numerous times, including in 2010 shortly before cancelling the float, blaming challenging market conditions.

In February this year, owners Apax Partners and Permira recruited investment banks JP Morgan and Goldman Sachs to identify potential investors. However, analysts said New Look would probably fall short of its “ambitious” £2bn target.

It is the first time New Look’s ownership has changed hands in more than a decade. The fashion retailer was last bought by private equity firms Apax and Permira in 2004.

Wiese, who is currently setting up discount fashion chain Pep&Co with former Asda chief executive Andy Bond, was also linked with a takeover of BHS earlier this year before Retail Acquisitions Limited acquired the high street chain for just £1 in March.

Commenting on the deal, Anders Kristiansen, said: “Brait have a track record of long-term and supportive investments - they give us the perfect platform to continue our strategy of growing the New Look brand in the UK, Europe and China.”

Chief executive of Brait, John Gnodde, added: “New Look is an attractive investment opportunity for Brait - it is a market leading brand, with a strong track record of double digit EBITDA growth, solid cashflow conversion, international reach, and the potential to grow rapidly in a number of geographic markets including China.”

New Look was advised by Goldman Sachs International, JP Morgan Cazenove, Clifford Chance and Price Waterhouse Cooper on this transaction.

More to follow…

@LukeToddUK

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