Brait to sell New Look stake as it seeks to raise funds

By

Sandra Halliday

Published
Nov 28, 2019

New Look may be starting to get back on an even keel after several fairly disruptive years, but the company still faces some changes ahead with news that a once-majority investor in the fashion retailer, which still owns a sizeable stake, is planning to sell off a number of its assets in the next five years.

South African company Brait, which also controls the Virgin Active gym brand and the Iceland supermarket chain, is aiming to rise up to £300 million, according to reports. It became the majority owner of New Look four years ago in a deal valued at £780 million but after the recent rescue financing deal went through for the fashion retailer, its stake was cut down to 18.5%.

The Brait board said that the move is part of the debt-laden firm's new strategy that is aiming to cut debt and return capital to shareholders. Brait is an investment vehicle whose largest shareholder is retail entrepreneur Christo Wiese. It has to repay a £350 million bond next year.

Selling the New Look stake, along with the holdings in Virgin Active and Iceland, would bring to an end a period in which the company had planned to be a major player in consumer-facing UK businesses. Accounting scandals at another of the companies he's involved with and the devastation on the UK High Street in recent years put paid to those plans.

However, with New Look still not back to full health and its bondholders controlling the firm, it's unclear how much (or little) the Brait stake would be worth.