Fat Face abandons IPO plans over market fears

Fat Face shop sign

Fat Face has scrapped plans to list its shares on the stock exchange, blaming market conditions.

The leisurewear specialist announced plans three weeks ago to raise £110m in an initial public offering (IPO), valuing it at more than £400m. It had planned to use the money to pay off debt and fund ambitious expansion plans.

The company had planned to open between eight and 10 new stores a year in the UK. It also intended to open two or three shops on the US east coast in the next two years and launch a US website.

But in a short statement the company said the plan was now on hold.

It said: "Despite a strong level of interaction with and interest from institutional investors, the company and its majority shareholder have decided to discontinue its plans for an IPO at this stage. Current equity market conditions are the principal factor in the decision.

"The board remains confident in the prospects for the business and will continue to execute the growth plans which are already under way."

The decision leaves Bridgepoint, the private equity firm that owns 70% of Fat Face, unable to cash in its investment after seven years. It bought Fat Face at the peak of the buyout boom in 2007.

The rest of the business is owned by management, employees and former employees. The scrapped IPO also puts on hold a payday for Sir Stuart Rose, the former Marks & Spencer boss who is Fat Face's chairman and has an undisclosed stake.

Fat Face's main customers are families, particularly mothers, with active lifestyles. The flotation was meant to tap into improving consumer confidence and strong demand among investors for new flotations with growth prospects.

The FTSE 100 index has fallen about 1% in the past week but remains close to its all-time high. Official figures showed on Wednesday that trading conditions for UK retailers were their best for a decade.

As Fat Face cancelled its flotation Zoopla, the property website, announced plans to proceed with its long-expected IPO.

Powered by Guardian.co.ukThis article was written by Sean Farrell, for theguardian.com on Thursday 22nd May 2014 09.30 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010

 

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