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Fat Face Plans $186 Million IPO as Retailers Sell Stock

May 1 (Bloomberg) -- Fat Face Group Ltd., the British ski and sportswear chain, plans to offer shares in an initial public offering, joining U.K. retailers such as Pets at Home Group Plc and Poundland Group Plc entering the stock market this year.

The offering to institutional investors will raise as much as 110 million pounds ($186 million), the Hampshire, England-based company said today in a statement. Shareholders including Bridgepoint will sell shares in the IPO and Fat Face will offer new stock to cut debt and pay related fees.

The IPO comes about seven years after Bridgepoint acquired control of the company for 360 million pounds. Fat Face, chaired by former Marks & Spencer Group Plc Chief Executive Officer Stuart Rose, is capitalizing on a strengthening consumer economy and a buoyant European market for IPOs that has seen retailers from AO World Plc to Boohoo.com Plc gain listings this year.

“Since 2010, we have delivered strong financial growth and we believe that we have created a firm foundation for continued expansion within the U.K., as well as laying down some initial plans for a controlled trial to take the brand to the U.S.,” Chief Executive Officer Anthony Thompson said in the statement.

Fat Face, founded in 1988, reported revenue of 178.8 million pounds in the financial year ended 2013, representing growth of 17 percent in two years. Store numbers have increased to 207 from 190 in that time. The retailer plans to boost selling space from 305,000 square feet (28,335 square meters) to between 450,000 square feet and 500,000 square feet over the next five years.

New Loan

Proceeds from the IPO, as well as 90 million pounds from a new loan, will repay the company’s existing debt, it said. The listed group’s net debt will be about 60 million pounds.

At least 25 percent of the shares will be freely traded after the listing, according to the company, which is being advised by Lazard Ltd. Citigroup Inc. and Jefferies International Ltd. are jointly coordinating the offer, with Canaccord Genuity Ltd. acting as lead manager.

In preparation for the IPO, Fat Face appointed three new non-executive directors, including former J Sainsbury Plc Chief Financial Officer Darren Shapland. British Sky Broadcasting Group Plc director Deborah Baker and Maria Kyriacou, managing director of ITV Studios Global Entertainment, were also named.

Fat Face, whose name is inspired by the Le Face Olympic ski run in Val d’Isere, France, said sales rose 12 percent in the 35 weeks ended Feb. 1. Earnings before interest, tax, depreciation and amortization gained 28 percent to 32.1 million pounds.

To contact the reporter on this story: Paul Jarvis in London at pjarvis@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net Sara Marley

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