The Simply Be and JD Williams fashion retailer N Brown has agreed a £191m takeover by a member of its founding family, Joshua Alliance.
Alliance will pay 40p in cash for each share of N Brown stock not already owned by himself and his family. Shares rose more than 40% after the announcement, to 38.5p.
The Manchester-based online fashion specialist, which also owns menswear brand Jacamo, at one time fronted by cricketer and former Top Gear presenter Andrew Flintoff, employs about 1,700 people in the UK.
Along with other online fashion specialists, it has struggled to cope with volatile economic conditions since the Covid pandemic, with sales dropping off as high street stores have reopened and competition from new online rivals has risen just as the costs of delivery have increased.
Russ Mould, investment director at stockbroker AJ Bell, said: “N Brown has had a difficult time on the stock market over the past 10 years, losing a significant amount of value. It has struggled with fierce competition, tired brands, legal issues, over-estimating the opportunity for plus-sized fashion and for a while seemed to make more money from interest on customer credit than it did from selling clothes.
“Many investors gave up on the stock a long time ago so it’s a surprise N Brown has lasted this long as a listed entity.”
Founded by Nathan Brown in 1964, the company was bought by the Alliance family in 1968 who had already snapped up JD Williams, founded in 1875. Traditionally the group’s goods were aimed at older women, but the company broadened its appeal to younger women in the 1990s and noughties, buying brands including the Figleaves lingerie group, which it has since sold off.
David Alliance, who sat on N Brown’s board from 1969 to 2012, was born in Iran where he reportedly began his career working in the bazaars before moving to Manchester in the UK as a teenager to work in the textile industry.
He went on to build a fashion manufacturing empire, snapping up businesses from the 1950s to the 1980s, leading to the creation of global thread and fashion components manufacturer Coats Viyella – a merger of two older firms.
He was made a Liberal Democrat life peer in 2004.
Joshua Alliance, who is a non-executive director of N Brown, already owns 6.6% of the company while the other members of the Alliance family including Lord Alliance, own a controlling 53.4% stake.
Mike Ashley’s Frasers, which owns 20.3% of N Brown, has said it will vote in favour of the deal for the group.
Joshua Alliance said: “My family have been supporters of N Brown for over half a century, providing capital and having been involved in the strategic leadership of the business. I am delighted to continue that history.
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“This transaction will support N Brown in accelerating its long-term growth potential and provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business.
“In the business’s current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets.”
Falcon 24 Topco, the vehicle Alliance is using to buy N Brown, said: “N Brown is not benefiting from being listed on the AIM market, whilst having to bear significant costs associated with its listing.”
It added that N Brown’s shareholder structure was “very low trading liquidity” and that the limited UK fund manager appetite for small cap consumer stocks meant it was not helped by the listing on London’s junior stock market.