Fat Face to cancel impending IPO

British clothing retailer Fat Face is said to be preparing to call off its plans for an upcoming floatation on the London Exchange Stock Market. The clothing company, which previously confirmed its plans to float 25 percent of its capital to raise up to 110 million pounds in an IPO earlier this month,

is set to cancels its plans after witnessing a lack of demand for new investors looking to invest in retail IPOs.

Fat Face to call off IPO due to 'insufficient' demand

Bridgepoint Captial, the private equity firm which controls Fat Face, is thought to have decided during a meeting on Wednesday evening to abandon its plans for its stock market floatation. Advisers warned board members that due to insufficient need for retail shares, the company would not be able to sell shares at the level they expected.

Last week saw Card Factory priced at the lower end of its IPO as shares fell 10 percent in market debut, whilst Saga Group revealed it was slashing its price range for its shares for it upcoming flotation. Fat Face, that currently has 208 stores across the country, has plans to open stores in Boston over the next 18 months, growth which is thought to have been funded by its floatation.

Sources believe that canceling its upcoming IPO may dampen the strong revival the clothing company has been witnessing over the past year. In 2007, Bridgepoint Capital acquired Fat Face for 360 million pounds. Then in 2009 the private equity firm injected new funding into the clothing company after tough trading left Fat Face severely damaged, with the company reporting a pre-tax loss of 225 million pounds.

Recently however, Fat Face appears to be undergoing a 360-degree turnover plan, which is reflected in its figures. In the 35 weeks to February 1, 2014, like-for-like sales increased 8.4 percent with EBITDA growing 28 percent to 32 million pounds.

“Fat Face has gone from strength to strength under the leadership of Anthony and his senior management team,” said Sir Stuart Rose, chairman of Fat Face earlier this month.

Fat Face is said to be preparing to make an official announcement on Thursday.