Leicester retailer NEXT and the Reiss family are set to acquire the entirety of Warburg Pincus’ (WP) 34% interest in the Reiss Group (Reiss) for £128m on a fully diluted basis.

Upon completion of the transaction, expected to take place in mid-October, NEXT’s holding in the Reiss business will increase from 51% to 72%.

The Reiss family’s holding will increase to 22% and the Reiss management team will hold 6% equity in the business. Following completion of this transaction, Reiss’s results will be consolidated into the NEXT plc accounts.

The news follows a period of strong continued growth for Reiss under the leadership of CEO Christos Angelides, who will remain in that role. Christos previously worked for NEXT for 28 years, serving 14 years on the NEXT plc Board as Group Product Director. Reiss will continue to retain its own Board of Directors, Reiss management will retain autonomy and creative independence and the business will continue to be headquartered in London.

Reiss’s websites and online operations, both in the UK and overseas, remain contracted to NEXT through NEXT’s Total Platform.

In the year to 28 January 2023, Reiss achieved total sales of £324.6m, an increase of 26.4% on the prior year. Profit before tax in the same period was £51.6m, an increase of 50.5% on the prior year.

Simon Wolfson, NEXT Chief Executive, said: “Reiss has performed exceptionally well since we first invested in March 2021. This success has been driven by the strength of its brand, first class management and the benefits of Total Platform; we look forward to continuing to develop the business with Christos and the Reiss team.

“Warburg Pincus has been an excellent partner throughout the term of our investment and we have enjoyed working with them during the last two years.”

Adarsh Sarma, Managing Director, and Rianne Schipper, Principal, Warburg Pincus, said: “Warburg Pincus is proud to have supported Reiss through its growth journey since 2016.

“We would like to thank Christos, Jonathan and the management team for their unrelenting hard work and commitment – they have done an outstanding job, consistently demonstrating category-leading performance.

“We have also been delighted by our partnership with NEXT and the way in which NEXT’s Total Platform has accelerated growth and enhanced the performance of the business.”

Christos Angelides, Reiss Chief Executive, said: “We are appreciative of the excellent partnership with Warburg Pincus over the past seven years – their expertise has been instrumental to our sustained development and they have been a strong and trusted partner.

“We look forward to continuing to focus on creating authentic and timeless collections for our customers and over the next few months we will be launching a number of new initiatives that will both expand the breadth and choice of our collections worldwide.”

Raymond James served as financial advisor to Reiss. Kirkland & Ellis served as legal advisor to Warburg Pincus. Slaughter and May served as legal advisor to NEXT. nmelaw served as legal advisor to the Reiss family. Fried, Frank, Harris, Shriver & Jacobson served as legal advisor to the Reiss management team.