Private equity firm and activist investor Elliott Advisors has joined a group of potential bidders for Reiss, a premium fashion retailer that is reportedly up for sale. Reiss is currently majority owned by Next, with Warburg Pincus also holding a significant stake. There have been reports suggesting that Next may be interested in selling its stake in Reiss, but there is also speculation that Next and Warburg Pincus may retain their positions, or that Next might even buy out its minority partner.

The involvement of Elliott Advisors in the potential bidding process adds more weight to the speculation surrounding the sale of Reiss. Elliott Advisors already owns bookstores Foyle’s and Waterstones and has significant fashion exposure through its ownership of Bantry Bay, a lender to Superdry and ASOS. This makes them a key player in the retail and fashion industry.

It is interesting to note that one of Elliott’s senior executives in London played a key role in Warburg Pincus’s acquisition of a stake in Reiss in 2016. This executive’s involvement could potentially give Elliott an advantage in the bidding process, as they have insider knowledge and understanding of the business.

Reiss has been tentatively valued at approximately £500 million based on its expected earnings for this year. It is worth mentioning that Next has been more focused on acquiring businesses recently, such as Joules and Jojo Maman Bebe. It would be unusual for Next to sell a successful business like Reiss, especially when it is fully integrated into Next’s Total Platform technology set-up. Next CEO Simon Wolfson has previously praised Reiss as “an outstanding brand with enormous potential,” and the company has plans to expand Reiss’s presence in the US by tripling the size of its store portfolio. All these factors make it surprising that Next might consider selling its stake in Reiss.

The auction for Reiss reportedly involves at least three parties, but none of them have provided official comments on the matter. It remains to be seen whether Elliott Advisors will formally bid for Reiss or if Next and Warburg Pincus will decide to retain their positions. The outcome of the bidding process will determine the future ownership structure of Reiss and its potential for growth and expansion.

Useful links:
1. Reiss Official Website
2. Next Investor Relations