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UK Retailer Next Ups Stake in Reiss as Warburg Pincus Exits

Fall fashions are displayed at a JCPenney store in Frisco, Texas, Wednesday, Aug. 30, 2023. (AP Photo/LM Otero)
Fall fashions are displayed at a JCPenney store in Frisco, Texas, Wednesday, Aug. 30, 2023. (AP Photo/LM Otero)
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UK Retailer Next Ups Stake in Reiss as Warburg Pincus Exits

Fall fashions are displayed at a JCPenney store in Frisco, Texas, Wednesday, Aug. 30, 2023. (AP Photo/LM Otero)
Fall fashions are displayed at a JCPenney store in Frisco, Texas, Wednesday, Aug. 30, 2023. (AP Photo/LM Otero)

Britain's Next agreed a deal to raise its stake in upmarket fashion chain Reiss Group to 72% from 51%, after the retailer teamed up with the Reiss family to buy Warburg Pincus's shares for 128 million pounds ($162 million).
Next, one of the UK's biggest clothing chains, has added a number of well-known brands to its stable in recent years, including parts of retailers such as Cath Kidston, Joules and Made.com.
Following the latest deal, the Reiss family's holding will rise to 22% and the management team will hold 6%.
Next said on Friday that Reiss had performed "exceptionally well" since it first invested in March 2021 and as such it decided to snap up the stake being sold by private equity firm Warburg Pincus.
In the 12 months to the end of January, Reiss's sales rose 26% year-over-year to 325 million pounds, while pre-tax profit was 51% higher at 52 million pounds.
Reiss's online operations are contracted to Next through its Total Platform business, which also provides warehousing and distribution services to Reiss, helping drive Reiss's growth overseas.
The deal is subject to regulatory approvals, Next said.

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UK's JD Sports Warns on Profit in 'Challenging' Market

A logo is seen outside the newly renovated JD Sports store at Westfield Stratford City in London, Britain, July 30, 2024. REUTERS/Hollie Adams/File Photo
A logo is seen outside the newly renovated JD Sports store at Westfield Stratford City in London, Britain, July 30, 2024. REUTERS/Hollie Adams/File Photo
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UK's JD Sports Warns on Profit in 'Challenging' Market

A logo is seen outside the newly renovated JD Sports store at Westfield Stratford City in London, Britain, July 30, 2024. REUTERS/Hollie Adams/File Photo
A logo is seen outside the newly renovated JD Sports store at Westfield Stratford City in London, Britain, July 30, 2024. REUTERS/Hollie Adams/File Photo

British sportswear retailer JD Sports Fashion downgraded its profit forecast after weaker trading in Britain and the United States and promotional activity at competitors hurt sales, and it warned the outlook was "cautious".
Shares in JD plunged 12% in early deals to a near five-year low of 84 pence, Reuters reported.
JD Sports, which has over 4,500 stores globally, said underlying revenue fell 1.5% in November and December in what it called a "challenging and volatile market".
It cut its profit forecast by as much as 40 million pounds ($48.9 million), or 4%.
The stock had already lost 27% of its value in the last three months on worries about consumer spending and amid a downturn in demand for Nike products, which account for about 45% of JD's sales.
"Market headwinds were higher than we anticipated," Chief Executive Régis Schultz said in a statement on Tuesday. "With these trading conditions expected to continue, we are taking a cautious view of the new financial year."
Peel Hunt analysts said JD's strategy of not discounting to match competitors was the right one.
"The long-term strategy is correct, and JD will continue to lead the market, but we must rein in short-term hopes," they said, adding that JD will benefit from any recovery at Nike.
Nike has warned its turnaround will be a slog after it lost ground in recent years to rivals, including Roger Federer-backed On and Deckers' Hoka, which have lured consumers with fresher and more innovative styles.
JD said while trading during December was stronger, November dragged, and for the 12 months to the beginning of February it expected pretax profit before adjusted items to come in between 915 million and 935 million pounds.
Its previous lower end of guidance had been 955 million pounds. It made 917.2 million pounds in its 2023/24 year.