The encyclopedia · Finance & Accounting · Financial decision · 1988–2023
FatFace was a British high street winner — then its PE debt caught up
A UK clothing brand bought for £360M in 2007 had its debt cut from £172M to £26M in 2020 — lenders sold it to Next for £115M.
FatFace · Bridgepoint Capital · Next plc · 2020-09-30
What happened
FatFace was founded in 1988 by Tim Slade, a former policeman, and Jules Leaver, a business graduate. Starting with a single ski shop in France, the brand grew into one of Britain's most popular mid-market clothing retailers — known for its fleeces, jeans, and the distinctive FatFace logo that became a fixture of British high streets. By the 2010s, it had hundreds of stores across the UK and Ireland and was a genuine British retail success story.
In 2007, private equity firm Bridgepoint Capital bought FatFace for £360 million. The deal loaded the company with debt. Over the following decade, FatFace struggled under the interest payments while the retail environment deteriorated. When COVID-19 hit in 2020, the company's debt had reached £172.4 million — far more than the business could sustain.
In September 2020, FatFace's lenders forced a restructuring. The group's debt was reduced from £172.4 million to £25.6 million — a 85% haircut — and control was transferred from Bridgepoint to a lender vehicle called Fulham Parent Limited. The private equity owners who had bought the company for £360 million lost their entire investment. In October 2023, UK fashion retailer Next plc acquired FatFace for £115.2 million, taking 97% of the equity.
Why it happened
- Bridgepoint's 2007 acquisition loaded FatFace with debt at the peak of the PE buyout boom — the company could service the debt in good times but had no buffer when the market turned.
- The 2020 COVID-19 lockdown shut all of FatFace's stores at exactly the moment when its debt was highest — the company had £172M in liabilities and no revenue coming in.
- FatFace was a victim of the private equity 'buy, borrow, flip' model — the company was purchased with debt that the business itself had to service, and when the flip window closed the debt crushed it.
The lesson
When you buy a company with debt, the company pays the price. Bridgepoint bought FatFace for £360M and lost it because the debt they put on the business was more important than the business itself.
Aftermath
Next plc acquired FatFace for £115.2 million in October 2023, taking 97% of the equity. The brand continues to operate as a subsidiary of Next, with its stores still trading on British high streets. The founders and the original private equity owners are gone — the company that Tim Slade started from a ski shop in France is now a division of the UK's largest fashion retailer by revenue. FatFace survived, but its original owners and investors did not.
Sources
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