Next is in talks to purchase UK-based lifestyle brand Fat Face for £100m, according to reports.
The news, initially published on Sky News, follows Fat Face reporting a 15% increase in annual sales to £282m for the year to 27 May.
It becomes the latest brand to be acquired, or saved, by Next which has recently snapped up the online furniture retailer Made.com from administration. Cath Kidston and Joules, which also encountered financial difficulties, were purchased by Next.
Next has taken on 44% of maternity wear retailer JoJo Maman Bebe, and also struck up partnerships with Victoria’s Secret and Gap.
Next – an Elite retailer in RetailX’s UK Top 500 – has become an exemplar of modern multichannel fashion retail, creating not only a longstanding physical retail business, but also taking an unorthodox approach to online retail.
For Next, online is seen very much as a more co-operative channel, with the company investing heavily in a new ecommerce platform – called Total – only to open it up to competitor brands and retailers to also use. It has also thrown open the doors to its warehouses and its fulfilment to these third-parties.
The model, which is akin to a marketplace, but one which also sells Next’s own-brand goods too, isn’t a counterintuitive as it seems. Next’s reasoning is that, by opening up its site to all comers across UK fashion it may well cannibalise some of its sales, but overall it attracts enough additional traffic that this is easily offset by the uplift it sees.
And the model has worked well since its introduction, with traffic rising across the pandemic. Traffic growth has fallen back in 2022, but actual user numbers continue to rise and the company is expecting to complete the roll out of Total by the end of 2023, several months ahead of the March 2024 deadline it had planned.
The company has also spent the pandemic and its aftermath snapping up some of the UK’s struggling fashion and homewares brands, buying a 74% stake in Joules for £34m and all the assets of failed UK online furniture store Made.com for £3.4m.
Despite this, Next is not immune to the impact of the UK economic woes, reporting profit guidance for the second half of 2023 will be down 5% on last year.
This company profile originally appeared in the UK Fashion 2023 report.
