NEXT Share Price Edged 2.1% Higher on the FatFace Acquisition

The NEXT plc (LON: NXT) share price edged 2.1% higher after announcing that it had signed a deal to acquire FatFace for a total consideration of £115.2 million ($140 million) in equity value. The company noted that it intends to pay for the acquisition in cash and by issuing new NEXT shares.

NEXT noted that the transaction would not significantly impact the current year's underlying profit before tax or EPS. The transaction is expected to be completed over the next few weeks, resulting in NEXT holding 97% of FatFace’s equity and the management team holding the remaining 3%. 

FatFace will maintain its management autonomy and creative independence as it moves forward. The company will continue operating with its dedicated Board of Directors and remain headquartered in Havant, Hampshire, UK. 

The commitment to preserving its identity underscores FatFace's dedication to its unique brand and corporate structure.

Furthermore, FatFace, which has been featured as a LABEL brand on next.co.uk since 2016, is in the process of transitioning its online operations onto NEXT's Total Platform. This strategic move is expected to be completed within twelve months, signifying a pivotal step in the brand's digital evolution and collaboration with NEXT. 

Next, a retail giant with a substantial footprint operates from approximately 460 stores in the United Kingdom and Ireland while maintaining a robust online presence, serving customers across more than 70 countries. 

The company's recent strategic focus has been expanding its “Total Platform” business, which involves investments in and acquisitions of smaller retailers to strengthen its overall portfolio.

In the current year, Next has continued to make strategic moves by acquiring the Cath Kidston brand and increasing its ownership stake in the upmarket fashion chain Reiss to 72%. These acquisitions align with Next's broader strategy to diversify its offerings and capture a more extensive retail market share.

FatFace is an established retail brand with a significant online and physical presence. The company operates 180 stores in the United Kingdom and Ireland. Additionally, it maintains a retail footprint in the United States and Canada, with 28 stores in the two markets. 

In the fiscal year ending May 2023, FatFace reported a pre-tax profit of £19.5 million from sales worth £282 million.

NEXT share price. 

The NEXT share price edged 2.10% higher to trade at 6998.0p, from Friday’s closing price of 6854.0p.