Fat Face


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Founded in 1988 by two ski enthusiasts selling T-shirts out of rucksacks to fund their hobby, the duo opened their first store in 1993.

By the time Advent acquired the business in 2005, it was a rapidly growing brand driven by a professional management team with a network of 97 UK stores and a loyal customer base.

“Brand development was a critical factor,” said Tim Franks who co-led the deal. “When we bought the business, it was very much a retailer selling Fat Face clothing. The management team developed it into a coherent brand with all the benefits that brings. When we entered, it was all about new stores; when we exited, the brand extensions had become an additional avenue for growth.”

While the store roll-out continued – Fat Face had 130 outlets at the time of exit – an enhanced product range, wholesale deals for hand-picked third-party retailers, improved mail order, online channels and international expansion also created fresh opportunities for growth.

Alongside strategic investments in the supply chain and head office functions, these developments contributed to a significant  rise in the value of the company, with Fat Face hitting its four-year performance targets in just two years.

"Advent’s ability to recognise the key drivers of the business helped the management team to focus on achieving its targets.”- Barry Carter, KPMG Partner

Sector expertise

Advent had been tracking Fat Face for four years before becoming involved with the business. When it came up for sale, we already knew a lot about the company and its previous backers and had a clear idea of how we could apply our sector focus to release additional value from the business.

A strong track record in the sector and an international focus on speciality retail was important to the Fat Face CEO Louise Barnes and CFO Stuart Owen, who had their own vision for the future of the business. “They knew we were experienced in their markets and that we’d been following the company for a while – and we knew they had a compelling vision for the Fat Face brand,” said Tim Franks.

Management expertise

Louise Barnes is a CEO who really knows products and marketing; Stuart Owens is an operationally focused CFO who is strong on supply chain and IT. They already had private equity experience when Advent invested, Advent being Fat Face’s second private equity backer. Both understood the importance of value creation. The second tier of management was also very strong, supporting the company’s culture and brand.

Although the Fat Face management team was first-class, additional expertise to the company’s board was needed to support the firm's plans for international expansion. Advent introduced Alan Giles to the company as chairman nearly a year into the investment. As ex-CEO of former Advent portfolio company HMV, Giles not only comprehended private equity, growth businesses and restructuring – but he truly understood retail operations and site development. Equally importantly, he really liked and understood the brand.

The team also recruited Alison Holmes, former head of international development at Debenhams, “Again, that was a case of finding a high-calibre person who brought immediate experience to the table, rather than someone learning their trade,” says Advent’s Andy Dawson. 

“The principles are the same for all successful retailers - an authoritative, differentiated store format, serving great value merchandise by enthusiastic, knowledgeable employees who are, like the customers, devotees of the brand.” - Alan Giles, Fat Face

Financial discipline

Although Fat Face’s strong brand and efficient operations were core strengths, additional financial discipline also created value in the deal.

The quality of reporting was already to a good standard.  It was also essential that the management team had the flexibility to invest in order to exploit the brand’s strength. The amount of debt put into the business was restricted, ensuring that there was the necessary cash available to fund the store roll-out. 

After early investments in the store roll-out it became clear that the expansion plans could be accelerated – the economics on some of the new stores were better than the older ones and some of the smaller sites were moved to new locations, generating much better returns. 

“I was used to payback periods of anything from two to five years on new outlets,” said CFO Stuart Owen. “But Fat Face stores pay back their capex within year one, typically. They’re up and running from day one.”

Channel extensions

Growing a successful high street brand isn’t just about opening new stores. To show real potential, a brand has to prove its versatility.

We had a four-pronged strategy to open up new areas of growth: develop multichannel sales, including online and catalogue; international expansion, via franchises; wholesaling, to increase brand presence elsewhere on the high street; and licensing, moving the brand into areas such as personal care and watches.

“We got particularly excited when our first  international franchises went live,” said Andy Dawson. “When the store opened in the Middle East and did very well, we felt we had something truly exciting on our hands.” Fat Face expanded to having 12 stores outside the UK, from Iceland to Ireland, Qatar to Kuala Lumpar.

Smart sourcing offered additional financial and operational benefits. Fat Face sourced low-cost products from the Far East, benefiting from strong gross margins. Maintaining the quality of supply is critical, however, which led to the opening of an Indian sourcing office which co-ordinated Fat Face’s buying efforts. The result was significantly improved control of quality and a reduction in the company’s reliance on China – offering less volatility in the supply chain.

Along with new store openings, the channel extensions contributed to an impressive performance by the company, with revenues rising 82 per cent and a tripling of EBITDA.  Fat Face was acquired in 2007 by private equity firm, Bridgepoint.




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Tim Franks

Managing Director, Advent International plc, London
T: +44 (0) 207 333 0800