RICHES TO RAGS
How Brait’s New Look deal bombed
Christo Wiese’s elite squad of corporate financiers bought New Look, a highly leveraged UK fashion retailer, just as the economy collapsed. The Brait share has been punished. Is this unjust, as most of the Brait portfolio is doing well, or a well-deserved outcome for poor judgment?
It’s not often that one of Christo Wiese’s companies sheds 50% of its value in one year. Especially a company that, barely a year before, was being touted as one of the burning-hot stocks of the JSE. Yet this is exactly where investment company Brait finds itself, less than two years after it clinched three of the most mouthwatering deals in recent history. First, in April 2015, it snapped up 80% of gym chain Virgin Active for R12.2bn (Richard Branson’s company holds the other 20%). A month later, it nabbed New Look, Britain’s second-largest retailer of women’s clothing after Marks & Spencer, for R14.1bn. And then for good measure, it took control of Iceland Foods — which sells frozen food and prepared meals in the UK, and is known for its "mums love it" tagline. At the time, Wiese (75) lauded the 48-year-old New Look, which has 872 stores in 20 countries, as fantastic because "there are not abundant opportunities, so you have to look very carefully to find companies that tick all t...
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