UK-based clothing company NEXT has signed terms to acquire lifestyle brand FatFace for a total consideration of £115.2m ($136.58m).

NEXT is acquiring the brand from a consortium of Financial Institutions.

FatFace operates more than 180 stores in the UK and Ireland and over 25 stores in the US and Canada. It also has an international digital business.

The company offers clothing, footwear and accessories for women, men and children.

Upon completion of the deal, NEXT will hold 97% of the equity while FatFace’s management will hold the remaining 3%.

In addition, the brand will retain its management autonomy, creative independence and its own board of directors.

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By GlobalData

The company will continue to be based in Havant, Hampshire, UK.

Under the leadership of its CEO, Will Crumbie, FatFace has recorded strong performance.

In the 52 weeks to 27 May 2023, the brand reported total sales of £282m and statutory profit before tax of £19.5m.

The company said that digital channels represented 40% of total sales while the remaining was primarily driven by retail stores.

FatFace expects to trade and develop its own retail store portfolio after the takeover under the leadership of Will Crumbie.

NEXT will pay part of the consideration in cash and part of it by issuing new NEXT shares.

The company expects the acquisition to have no material impact on its underlying profit before tax or earnings per share in the current fiscal.

The deal is anticipated to close within the next few weeks.

Since 2016, FatFace has been selling on next.co.uk as a LABEL brand.

It is expected to migrate its online operations onto NEXT’s Total Platform within the next twelve months.

Eversheds Sutherland and EY acted as advisors for NEXT while Rothschild & Co served as the financial adviser for FatFace and the sellers for the transaction.