THE £300M plus flotation of the clothing retailer Fat Face, a company chaired by the former M&S chief executive Stuart Rose, was pulled last night because of a lack of investor support.
News of the flotation’s difficulties came as Saga, the insurance to travel group for over 50s, announced that it was narrowing its price range at the lower end on fears that institutional demand had not been as strong as expected after healthy interest from retail investors.
After an impressive start to the year, London’s new issues market has been suffering from indigestion because of the sheer number of companies coming to the market and nervousness after a number of floats have ended up trading below issue price.
Fat Face had targeted primary proceeds of £110m going towards paying off existing debt, with a further £90m raised to pay down existing shareholders, primarily Bridgepoint, the private equity group.
Fat Face had revenue for the financial year ended 2013 of £178.8m, up from £152.7m in 2011, and adjusted earnings of £31.2m, up from £24.8m in 2011.
The business was founded in 1988 on the slopes of the French Alps and nearly collapsed after the financial crisis. It made a loss of £225m in 2009 after being rescued by Bridgepoint. It has 208 stores.
Sources close to the deal said last night the business had received a good reception but ultimately had been defeated by weak market conditions. It is the most prominent issue to have not got away this year.