South African retail baron Christo Wiese through his private equity vehicle Brait SE has acquired 90% 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% stake will be held by Founder Tom Singh and other members of management. new look CEO, CFO and CCO will remain with the company.
New look with more than 800 global stores across 23 countries has posted double digit EBITDA growth in recent years. It is also the leader in the 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 e-commerce platform incorporating ‘click and collect’ options.
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 SE and new look’s management are comfortable with the company’s current leverage ratio given its strong cash flow generation.
The acquisition is not going to affect the sourcing strategies of the brand as the top management is still the same. new look is part funding its suppliers in bangladesh to participate in IFC’s Cleaner Production Programme in which IFC works collaboratively with factories to help them understand their current patterns of water consumption and water drainage, and enables them to create a water footprint report. From this, they can decide to invest in new and simple technologies which increase water efficiency.
Following a successful pilot programme with one of its key supplier factories in 2013, another three supplier factories in bangladesh have joined the programme and new look is encouraging more to join.
