News Column

Fat Face unveils London listing to pay off debt

May 2, 2014

MICHAEL BOW



FAMILY friendly retailer Fat Face yesterday became the latest private equity-backed retailer to tee up a listing on the London stock market, after announcing plans to raise 110m to cut debt.


The business, which has about 200 stores across the UK, will offer shares to City fund managers after private equity backer Bridgepoint moved to start cashing out its 75 per cent stake.


Former Carpetright boss Darren Shapland will also join the board, chaired by former Marks & Spencer boss Sir Stuart Rose, ahead of the float.


"There are lots of hurdles to cross before we float but this is the right time," Fat Face chief executive Anthony Thompson said in an interview with City A.M. Fat Face becomes the fourth private equity-backed retailer to float this year after KKR listed pet store Pets at Home, Warburg Pincus began its exit of high street discounter Poundland and Charterhouse announced plans to float Card Factory.


Fat Face, which takes its name from Le Face ski run in the French resort of Val d'Isere, is hoping that strong loyalty from its distinctive customer base will help it keep up the 8.6 per cent revenue growth from last year.


Almost 80 per cent of Fat Face's customers are married or co-habiting and the average customer is 41 years old. Four in ten have young children.


"It continues to attract a broad church of customers who like relaxed casual clothing. We're not planning on selling suits anytime soon," Thompson said.


"Our customers don't want to be two steps ahead of catwalk fashion. We didn't help ourselves in 2008 and 2009 when there was a slight reposition of the brand towards younger consumers. Our customers said that's not what we want and we listened."


Bridgepoint was forced to writedown funds in Fat Face and inject new equity in 2009 after poor trading.


BEHIND THE DEAL CITIBANK | DAVID WORMSLEY 1 Known in financial circles as The Worm, Wormsley led Citibank's team as joint co-ordinator, joint sponsor and joint bookrunner.


2 Wormsley has advised on enormous deals including Ferrovial's 10bn purchase of BAA, a 41bn restructuring at Shell, Glencore's 60bn float in 2011 and its Xstrata deal.


3 He was previously Guy Hands' financial adviser. But the two fell out over a dispute when Hands lost a billion-dollar lawsuit claiming Wormsley tricked him into buying EMI.


Also advising...


Fat Face is being advised by joint global co-ordinators, joint sponsors and joint bookrunners Citibank and Jefferies, with Canaccord Genuity acting as lead manager, Lazard as financial adviser and MHP Communications handling financial public relations for the float.


OLIVER SMITH ARE YOU A TYPICAL FAT FACE CUSTOMER?


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Source: City A.M. (UK)


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