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The activist investor and personal fairness agency Elliott Advisors is amongst a gaggle of potential bidders circling Reiss, the upmarket British style chain.
Sky Information has learnt that Elliott, which owns the books retailers Foyle’s and Waterstones, is without doubt one of the events that has expressed an curiosity in shopping for Reiss from Subsequent and Warburg Pincus, its present shareholders.
It was unclear on Wednesday whether or not Elliott would desk a proper bid for the clothes retailer, which was based in 1971 by David Reiss.
No less than three events are mentioned to be concerned within the public sale, which is being overseen by bankers at Raymond James.
One issue leaning in Elliott’s favour is that Paul Greatest, certainly one of its senior London-based executives, was instrumental in Warburg Pincus’s acquisition of a stake within the chain in 2016.
“The enterprise has constructed an enviable place in its core UK market, with a broad and dependable buyer base, and we imagine there’s a important alternative to construct on this success and speed up growth internationally,” Mr Greatest mentioned seven years in the past.
By its possession of Bantry Bay, a specialist lender with publicity to Superdry and ASOS, Elliott has a big understanding of the UK retail sector.
Sources insist that it stays attainable that Subsequent and Warburg Pincus will determine to not promote Reiss.
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Based mostly on anticipated earnings earlier than curiosity, tax, depreciation and amortisation within the present monetary yr of virtually £65m, Reiss might be valued at in extra of £500m.
One particular person near Subsequent has solid doubt on whether or not it will finally promote its 51% stake, with a retail government suggesting that it might as an alternative search to amass Warburg Pincus’s minority curiosity.
If it did determine to dump its shareholding, it will be a big transfer for Subsequent, run by chief government Lord Wolfson.
Beneath his lengthy stewardship, Subsequent has delivered spectacular returns for shareholders and remodeled itself into Britain’s clothes retailer.
In recent times, it has diversified by buying a string of distressed retail manufacturers, typically vying with the billionaire tycoon Mike Ashley to snap up ailing retailers.
It has struck joint ventures with corporations together with Victoria’s Secret and Hole UK, whereas shopping for outright the infant merchandise retailer JoJo Maman Bebe alongside hedge fund Davidson Kempner, and the style chain Joules.
The energy of its steadiness sheet has enabled it to wield important muscle in negotiations with landlords throughout a interval when conventional rivals similar to Arcadia Group and Debenhams have crashed into insolvency.
It purchased an preliminary 25% stake in Reiss in 2021, making a £33m fairness funding to purchase shares from Warburg Pincus.
Final summer season, it exercised an choice to take majority possession of the chain by snapping up an additional 26% shareholding.
Lord Wolfson described Reiss on the time of the unique deal as “an impressive model with huge potential”.
Reiss’s on-line operations have now migrated to Subsequent’s Complete Platform, a know-how service set as much as deal with smaller retailers’ e-commerce logistics and gross sales.
The reasonably priced luxurious style chain trades from greater than 60 UK outlets, and has plans to increase its US property of seven shops threefold within the coming years.
In addition to its personal shops, its males’s and ladies’s style merchandise are additionally bought at Selfridges within the UK and Bloomingdale’s within the US.
Elliott and Subsequent, declined to remark.
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