Financial News

  • 22 May 2014, 16:35

Fat Face Pulls Float As City IPO Fashion Fades

The fashion retailer Fat Face is expected to abandon its planned flotation in a move that could mark a turning point in the City's frenzy of recent company listings.

Sky News understands that the chain, which is controlled by the private equity firm Bridgepoint, decided on Wednesday evening to call off its initial public offering (IPO), which was due to raise 110m.

An announcement could be made as soon as Thursday.

Advisers to the company are said to have informed board members that there was insufficient demand at the level at which it wanted to sell shares to new investors.

City insiders said the decision was less a reflection of Fat Face's appeal to prospective shareholders and more about a broader recent change in confidence among City institutions.

In recent weeks, Card Factory, another retailer, has disappointed after coming to the market, while Saga said on Wednesday it was cutting the price range for its IPO despite what it claimed was buoyant demand.

So far this year, Appliances Online, which has also traded down since its debut, Pets At Home and Poundland have floated, with the sofa retailer DFS also poised to do so in the coming months.

Fat Face is chaired by Sir Stuart Rose, the former Marks & Spencer (M&S) boss, who also chairs the online grocer Ocado.

Fat Face has more than 200 stores in the UK and Ireland, and plans to open shops in Boston in the US during the next 18 months.

Fat Face's announcement of its intention to float would say it was seeking gross proceeds from investors of tens of millions of pounds to fund its growth.

The chain was established in 1988 selling T-shirts in the Alps.

Its controlling shareholder, Bridgepoint, has been an investor since 2007, and has not had an entirely trouble-free period of ownership, having to inject additional capital during difficult trading conditions.

However, the company has been performing strongly in recent times, with sales understood to have approached 180m in 2013, and robust like-for-like revenue growth.

Fat Face could not be reached for comment on Wednesday.

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