Fat Face will soon be under Next ownership

High Street retailer Next is reportedly close to completing an acquisition deal with fashion chain Fat Face. This purchase would involve Next taking over Fat Face's 200 stores, adding to Next's existing network of 500 High Street shops. The agreement is anticipated to be finalized this week, as per initial reports by Sky News.

This acquisition aligns with Next's ongoing strategy of expanding its presence through purchases. In recent times, Next has acquired several retail companies, including Joules and Made.com. Additionally, Next has invested in JoJo Maman BéBé and increased its stake in Reiss from 51 to 72 percent, said the BBC.

Next previously said it is is adapting its business model in response to the deep rooted and lasting changes it perceives are at work in the retail sector. The acquisitions contribute to Next's strategy of strengthening its "Total Platform," a suite of online services designed for third-party brands. Nearly half of its UK Online orders are collected in- store and the majority of returns are also processed via its stores.

Fat Face encountered financial difficulties during the Covid-19 pandemic, leading to its acquisition by a consortium of lenders in 2020. However, the company reported a 15 percent increase in sales and a notable rise in profits in its latest annual results. Last year, reports indicated that Fat Face had enlisted investment bank Rothschild to seek potential buyers for the business.

The UK's retail sector has been grappling with challenges, including decreased consumer spending amid the ongoing cost-of-living crisis. While inflation has started to recede after surging in 2022, it remains at elevated levels, and retail sales have not yet fully rebounded.