South African retail heavyweight Christo Wiese through his private equity vehicle Brait SE has acquired 90 per cent stake in UK fast fashion apparel retailer New Look.
Brait SE has acquired the stake for £780 million, primarily from funds advised by Apax Partners and Permira, which managed the company since the last 11 years.
The remaining 10 per cent stake will be held by founder Tom Singh and other New Look management officials.
“New Look CEO Anders Kristiansen, CFO Mike Iddon and CCO Roger Wightman will remain with the Company,” a New Look press release said.
The press release added that over the past 11 years, under the Apax and Permira Funds’ ownership, New Look has undergone a transformation and is now the leading clothing retailer with more than 800 global stores.
According to Brait, New Look seemed attractive as it has posted double digit EBITDA growth in recent years, has a solid cash flow generation and established UK footprint in the higher growth value segment.
Among other reasons it is also the leader in UK market value share and has strong growth prospects in France, Germany, Poland and especially China which is a priority market.
New Look also has a well-developed multi-channel offering via traditional stores and a fast growing ecommerce platform incorporating ‘click and collect’ options.
And lastly Brait is of the opinion that the scale and efficiency of New Look’s fast fashion operating model from source to customer is difficult to replicate.
New Look has net financial debt of £1 billion, however Brait and New Look’s management are comfortable with the company’s current leverage ratio given its strong cash flow generation.
Subject to market conditions, the Company will review financing alternatives in order to optimise the capital structure within the same leverage range.
