Wednesday, January 23, 2019

Fat Face to abandon flotation on UK stock market


The high-street fashion brand Fat Face is reported to abandon its flotation on the UK stock market after a lack of demand for retail shares.

The chain – currently controlled by the private equity firm Bridgepoint – decided on Wednesday evening to call off its initial public offering (IPO) which was expected to raise £110m. Currently, the company has 208 stores around the UK and Ireland but is due to cancel the IPO due to “current equity market conditions” whereby demand from investors has seemingly decreased for other retail IPOs.

In a statement today, Fat Face 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.”

The move suggests the growing concerns of investors surrounding stock-market bound companies like the greeting card and gift store chain Card Factory, which has disappointed after its entrance into the market and Saga – the cruises-to insurance group – who revealed on Wednesday that it would be lowering the price range for its IPO.

While Fat Face plans to abandon the float, companies such as retail chain B&M and property website Zoopla have unveiled IPO plans.

Chris Searle, corporate finance partner at accountants BDO, commented: “The market has had a good run in this year to date, but valuations have come off in recent weeks, perhaps reflecting fatigue on the part of institutions or greed on the part of companies and their advisers in terms of valuation.”