Reiss owners 'considering a sale' as retailer continues to outperform
today Jan 21, 2020
A news report said that Warburg Pincus, which acquired a substantial stake in the firm back in 2016, has appointed investment bank Rothschild to look at its strategic options.
The move was reported by Sky News and if true, comes eight months after Warburg Pincus categorically denied that it was exploring a sale of the firm.
Back when it bought control of the retailer, Reiss was valued at around £230 million and a year ago that was said to have risen to £280 million.
It’s unclear what that figure might be today, or what it could be by Q2, which is when Sky said any sale is most likely to get under way.
The environment for fashion retail has declined further in the UK since 2016 and that decline has accelerated since the sale rumours back in May last year. But Reiss’s apparent ability to shrug off the tough times and post improving results should mean it enjoys a premium valuation.
The label has continued to benefit from the ‘influencer effect’ with big names such as the Duchesses of Cambridge and Sussex, Tess Daly and Amanda Holden, helping to drive certain key items to sell-out status.
This boosted its sales in the last year for which we have figures (the 12 months to February 2019) by over 8% to nearly £187 million with EBITDA up 21%+ to almost £20 million. In a recent interview, a Warburg Pincus spokesman said the company was expecting a 55% surge in EBITDA in the current financial year. CEO Christos Angelides — who joined in 2016 in what was seen as a coup for Reiss as he’d been tipped for the clothing & home post at M&S — seems to have the Midas touch.
As well as being a top performer in John Lewis where it has a large number of concessions, Reiss has its own stores and webstore and sells abroad via Nordstrom in the US and Shinsegae in South Korea.
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