Warburg Pincus has acquired a majority equity interest in Reiss Holdings, the owner of the men’s and women’s fashion and accessories brand Reiss. The transaction by Warburg equates to an enterprise value for Reiss of £230 million ($327 million).
Reiss is an international luxury fashion brand with more than 160 retail stores in 15 countries. Annual revenues in 2016 were £146 million ($208 million) with operating income of £24 million ($34 million) resulting in a 16% operating margin. The company was founded by David Reiss in 1971. Mr. Reiss retains a significant investment in the business and will remain as Chairman and CEO. The company is based in London (www.reiss.com).
The partnership with Warburg Pincus will enable Reiss to increase its store count in the UK and internationally – particularly in North America, Asia and Australia – with a goal of 250 stores worldwide. Warburg Pincus has significant experience investing in retail companies across the world. Past investments include Neiman Marcus (US), Poundland (UK), InTime (China), Kidswant (China), Restoque (Brazil), Pet Center (Brazil), Kalyan Jewellers (India) and Biba (India).
“As long-term growth investors, we look forward to partnering with David and his team and supporting the global expansion of the company,” said Paul Best, a managing director at Warburg Pincus. “The business has built an enviable position in its core UK market, with a broad and loyal customer base, and we believe there is a significant opportunity to build on this success and accelerate development internationally.”
Warburg Pincus has more than $40 billion in assets under management and has raised 15 private equity funds which have invested more than $55 billion in over 750 companies in 40 countries. In November 2015, the firm reached a final close of Warburg Pincus Private Equity XII, LP at the hard cap of $12 billion. Warburg Pincus was founded in 1966 and is headquartered in New York with offices in Amsterdam, Beijing, Hong Kong, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo and Shanghai (www.warburgpincus.com).
Morgan Stanley (www.morganstanley.com) was the financial advisor to Reiss and Squire Patton Boggs (www.squirepattonboggs.com) was the company’s legal advisor. Financo (www.financo.com) was the financial advisor to Warburg Pincus and Freshfields Bruckhaus Deringer (www.freshfields.com) acted as legal advisor.
© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-14-16