Next links with finance firms to buy Jojo Maman Bébé, no immediate job losses
Next is continuing its acquisition spree as it expands in the mother-and-baby market with the purchase of Jojo Maman Bébé in a consortium with a group of finance firms.
It won’t be the majority owner though with the firm taking a minority — albeit a large minority — stake, adding up to 44%. The remaining 56% will be owned by investment companies managed or advised by hedge fund Davidson Kempner.
Next is also making a £16.3 million investment in the brand funded from its own cash reserves.
Next chief Simon Wolfson said: “We are excited to see what can be achieved through the combination of JoJo's exceptional product with Next's infrastructure and Davidson Kempner as our investment partner."
Jojo Maman Bébé’s founder Laura Tenison will leave the business after almost three decades as part of the deal. She was one of the shareholders selling her stake.
Tenison said she was “excited by the opportunities this new partnership will offer”, even though she won’t be part of those opportunities. She also said she was “exceptionally proud” of the brand’s achievements, after leading it “from a kitchen table start-up to being the UK's leading specialist boutique mother and baby brand”.
But while Tenison is exiting, Gwynn Milligan is staying and steps up as CEO after five years at the firm, originally joining as commercial director. Other members of the management team are also staying.
Importantly too, the company will continue to operate its 87 physical stores in the UK, which will come as a relief to its almost-1,000 staff. The report said there will be “no immediate job losses”. However, management also said that Next is keen to continue with any stores that are "running profitably".
The retention of the physical stores is perhaps no surprise as Next is adept at running both physical and online retail operations including both own-brand and other branded stores.
But the move does raise the prospect of future Jojo Maman Bébé concessions opening inside Next stores and it will be interesting to see whether any standalone stores for the label that are close to large Next locations are eventually merged into the larger business.
Apparently, the long-term strategy hasn’t yet been decided on and the brand will stay a distinct entity for the foreseeable future.
Under Next’s aegis, the label is also likely to see major online expansion.
Staff were told the deal would “ensure the longevity of the brand for generations of new customers”.
Next has a history of buying major minority stakes in premium businesses, its purchase of a substantial holding in Reiss being a good example.
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