Next has joined forces with the Reiss family to buy out private equity firm Warburg Pincus' stake in upmarket fashion retailer Reiss in a deal that values the brand at £376 million.

The two parties have agreed to spend £128m purchasing a 34% stake in the luxury clothing chain, which was founded in 1971 as a men's tailoring store in London and now has 266 outlets across 18 countries. Warburg Pincus initially bought a majority stake in Reiss seven years ago, since when the company has expanded across Asia, Australia and North America.

Upon the deal's completion, Next will its stake in Reiss from 51% to 72%. The Reiss family will possess 22%, with the remainder held by the Reiss management team.

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Next bought an initial 25% stake in Reiss in 2021 in a deal worth £33m, which allowed Reiss's website and online operations to migrate to Next's Total Platform e-commerce outsourcing service. Next subsequently exercised an option in April 2022 to acquire a further 26% share of the brand's equity.

Next has rebounded strongly since the pandemic and has bought or forged joint ventures with several distressed retailers such as Joules, Cath Kidston and Victoria's Secret in recent years. In August it upgraded its annual profit forecast for the second time this year after stronger-than-expected summer sales.

"Reiss has performed exceptionally well since we first invested in March 2021," Next chief executive Simon Wolfson said. "This success has been driven by the strength of its brand, first class management and the benefits of Total Platform; we look forward to continuing to develop the business with [chief executive] Christos [Angelides] and the Reiss team.

READ MORE: Next shares fall as retailer predicts 'difficult year' to come

"Warburg Pincus has been an excellent partner throughout the term of our investment and we have enjoyed working with them during the last two years."

Mr Angelides, who was appointed chief executive in 2017, will remain in that role with Reiss retaining its own board of directors. Mr Angelides previously worked for Next for 28 years, and for 14 of those years was a member of the board as group product director.

Shares in Next closed yesterday's trading 40p higher at 7,028p.