Brait investment house has made a 90 per cent acquisition of UK retail powerhouse New Look.
This deal is set to be worth 780 million pounds primarily from funds advised by Permira and Apax. The acquisition values New Look at an enterprise value of 1.9 billion pounds.
According to a SENS statement, New Look is positioned in the fast fashion value segment of the apparel market which is driven by a number of factors including- increasing consumer demand for more affordable fashionable clothing, improvements in the supply chain and growth in demand and supply associated with increasing popularity of e-commerce.
With 809 stores in the UK alone, New Look was attractive to Brait on the following reasons – It represented double digit growth in the last recent years, solid cash flow generation, leading UK market value share. It is the number two overall womens wear and number one among under 25 womens wear and strong growth prospects in France, Germany, Poland and China as a priority market.
New Look has net financial debt of 1 billion pounds. Brait and management are comfortable with the Company’s current leverage ratio given its strong cash flow generation.
Subject to market conditions, New Look will review financing alternatives in order to optimise the capital structure within a similar leverage range.
According to reports, New Look’s CEO Anders Kristiansen told reporters in February that the retailer was ready for a stock market flotation, though that decision was up to the owners.