Next Plc is taking a 25 per cent stake in the Reiss high street fashion chain in a deal estimated to be worth around £200 million.
Next chief executive Simon Wolfson said they had decided to strike a strategic partnership with the brand because of what he called its huge potential.
Once the move is cleared, his company plans to invest £33 million into Reiss and pay off £10 million of debt in order to help it grow.
Reiss offers a more designer take on traditional high street fashion, and has become a favourite of celebrities including the Duchess of Cambridge.
It has reported strong sales growth in recent years despite pressure on high street fashion retailers.
It is the latest in a series of recent high street acquisitions and deals which included Next becoming a franchise partner for the UK arm of Victoria’s Secret last summer, Marks and Spencers buying Jaeger out of administration and Boohoo doing the same with the Debenhams brand when that went under.
Next – which is based in Leicestershire and has benefited from a combination of strong online sales during the pandemic and decisive actions at the start of the first lockdown – said it hopes its infrastructure capabilities can serve as a “launch pad” for Reiss’s growth plans in the UK and overseas.
Reiss will transition its online platform, warehouse, distribution and logistics to use Next’s platform to run retail websites and back-end operations.
The move will see Reiss boss Christos Angelides return to the fold at Next, where he worked for 28 years until 2014.
Next said that Mr Angelides and his creative team will continue to lead Reiss.
In the year to February 2020 – before the impact of the pandemic – Reiss reported a 22 per cent jump in turnover to £227.4 million.
Lord Wolfson said: “Reiss is an outstanding brand with enormous potential and a first-class management team.
“We are excited to see what can be achieved through the combination of Reiss’s exceptional product, marketing and brand building skills with Next’s Total Platform infrastructure.
Mr Angelides, Reiss chief executive, said: “I believe the partnership with Next will be transformational for Reiss’ operational effectiveness.
“Next’s infrastructure will ensure Reiss is not only more efficient as a business but more effective at serving its customers directly through Reiss stores, at reiss.com and through its worldwide partners.”
Reiss company currently operates in 14 countries from 79 stores, 104 concessions and via wholesale and franchises.
In its first year, after accounting for integration and acquisition costs, the investment is expected to have minimal impact on Next group profits but the business expects a positive contribution in subsequent years.
FTSE 100 listed Next is the UK’s number one online clothing retailer.
It has around 500 stores in the UK and Eire and an online presence in more than 70 countries selling its own branded clothes and accessories and more than 700 other fashion, home and beauty brands, including Reiss.
Reiss was launched in 1971 and its products are sold through its own stores, online, wholesale and through licensing, franchise and concessions, with more than 257 points of sale in 14 countries across the UK, US, Europe, the Middle East and Africa and Asia.
