Fat Face founders set to receive £90m in sale

The founders of Fat Face will be in line to recieve a £90m windfall when the clothing retailer changes hands this month. NM Rothschild, which has been appointed to sell the business, is inviting first-round bids by tomorrow.

The business is expected to fetch in the region of £300m - netting Advent, the private-equity firm that owns a 54% stake in the company, a bumper return. When Advent first bought into the company in 2005 it was worth £100m. Tim Slade and Jules Leaver, Fat Face's original founders, own 30% of the company while the executive management team, including chief executive Louise Barnes and finance director Stuart Owens, control 16%.

The management team is expected to reinvest in the business once it changes hands. It is unclear whether the founders will sell out or reinvest. Fat Face is one of the fastest-expanding retailers in the country. By the end of May it is expected to have about 130 stores. This figure is projected to expand to 190 stores by 2010-11. Turnover is forecast to grow from £111m in the 2006-7 financial year to £214m by 2010-11.

Fat Face is working on a pilot project to sell men's and women's clothing and accessories at the John Lewis store in Cheadle, near Manchester. Four more stores will be piloted this spring and, provided that goes well, John Lewis has committed itself to a 20-store roll-out of the Fat Face brand from spring next year.