Next to Increase Stake in Reiss to 72 Percent

LONDON — British high-street retailer Next on Friday revealed that it and the Reiss family have agreed to acquire all of private equity firm Warburg Pincus’ 34 percent interest in the Reiss Group for 128 million pounds.

The transaction, which is expected to take place in mid-October, would see Next’s holding in the brand go up from 51 to 72 percent. Meanwhile, the Reiss family’s share will increase to 22 percent, with the remaining 6 percent held by the Reiss management team. Warburg Pincus acquired a majority stake from the Reiss family in May 2016.

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Next said the deal would not contribute to the underlying profitability of the group, but there would be a non-recurring, non-cash, exceptional gain in its accounts in the period.

The British high-street giant, which operates a chain of physical stores and has been transforming itself into an online platform for third-party brands in the vein of Amazon, took a 25 percent stake in its rival Reiss back in 2021 as it seeks to pump up its online portfolio of fashion, lifestyle and beauty brands.

Under the terms of that agreement, Next exercised the option to acquire an additional 26 percent interest in Reiss at pre-agreed terms before July 2022, and became the majority shareholder.

The company said further investment in Reiss follows a period of continued growth for the brand under the leadership of its chief executive officer Christos Angelides, who was appointed to the role in 2017.

In the year to Jan. 28, Reiss had total sales of 324.6 million pounds, up 26.4 percent year-over-year. Profit before tax in the period was 51.6 million pounds, a 50.5 percent jump compared to the prior year.

In a bid to woo a more sophisticated demographic, Reiss earlier this week unveiled its premium line, Atelier. The name of the line is an homage to the in-house team of designers at Reiss, who have all held positions at luxury fashion labels.

The Atelier collection, which is set to launch online and in select stores on Sept. 13, comes with a strong tailoring focus and uses a neutral color palette with silk, Italian wool and cashmere-blend fabrications. The price point of the Atelier line will be two to three times higher than the main collections at Reiss, which start at around 150 pounds.

In recent years the brand has become a royal fixture with the likes of Kate Middleton and Meghan Markle. It has also recently become the official travel partner for the McLaren Racing Formula 1 team.

Simon Wolfson, CEO of Next, said the success of Reiss under the new ownership “has been driven by the strength of its brand, first-class management, and the benefits of Total Platform,” which is Next’s suite of online services for third-party sellers.

Angelides added: “We are appreciative of the excellent partnership with Warburg Pincus over the past seven years. Their expertise has been instrumental to our sustained development and they have been a strong and trusted partner. We look forward to continuing to focus on creating authentic and timeless collections for our customers and over the next few months, we will be launching a number of new initiatives that will both expand the breadth and choice of our collections worldwide.”

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