Some fascinating rustling in the retail undergrowth this week. While Mike Ashley’s Frasers continues to build its stake in online fast fashion retailer Boohoo — now above 10% — Next has also been doing some shopping.
Reiss has around 160 stores but do not expect them to be converted into Next outlets.
The management team under Christos Angelides will be allowed to get on doing what it does well — profits rose by half to £51.6 million last year — while Next takes care of all the boring bits, from IT to warehousing.
Reiss is one of five retailers Next has struck this sort of deal with, sometimes taking stakes, as with today’s deal and Victoria’s Secret, sometimes buying outright as with stricken Joules last December, and sometimes in joint venture partnerships as with The Gap.
It is a shrewd model Next calls Total Platform. There is no reason it cannot roll it out to many more fashion brands struggling under the weight of their overheads and the headache of their admin and only too happy let Uncle Simon take all the pain away.
At the other end of the High Street Frasers is also snapping up brands right left and centre. It already owns an eclectic portfolio that encompasses Sports Direct, House of Fraser, Gieves & Hawkes, Jack Wills, Donnay and Slazenger. Frasers has not yet made clear its long-term intention towards Boohoo other than to say that its stake is in line with its strategy of building “supportive” positions in “attractive” companies as it has with Asos and Hugo Boss.
Fashion retail is in a state of flux, exposed to the chill winds of the cost of living crisis more than most sectors. There will be more victims in the coming months. If current trends continue there will be two titans fighting over the scraps: Simon Wolfson and Mike Ashley.