Fashion label Lipsy snapped up by Next

The husband and wife founders of fashion label Lipsy were £3.5m (€4.46m) richer today after being bought out by retail giant Next.

The husband and wife founders of fashion label Lipsy were £3.5 million richer today after being bought out by retail giant Next.

Jeremy and Marcelle Stakol, who own 25% of the business, have sold up, along with their private equity backers, in a deal worth £17.4 million.

The brand is aimed at younger women and counts Prince William's girlfriend Kate Middleton and TV presenters Holly Willoughby and Alexa Cheung among its fans.

Under the deal, Next has bought the share capital of the company for £14m (€17.8m) , while also paying off £3.4m (€4.3m) worth of loans. Other undisclosed payments could follow in future years depending on performance.

Lipsy's existing management team, led by Mr Stakol, will also stay on and run the business.

Next said there were no plans to market the brand through its own stores, but the group will use its capital and expertise to help "accelerate" its development into a leading younger women's brand.

Lipsy was founded six years ago, and now boasts annual turnover of £20m (€25.4m).

Its clothes are sold through several major retailers including Top Shop, House of Fraser and Selfridges, as well as the internet.

The company is due to open its first store at Brent Cross shopping centre in North London next month, and reportedly had plans for as many as 25 sites across the UK.

Mrs Stakol said in a recent interview: "We've focused on making sure every piece is sexy and body conscious. The 12 women in the design team are living the Lipsy life – they go out at night and want something new to wear."

She said a picture of Ms Middleton wearing one of their dresses resulted in "thousands" of internet enquiries.

Mr Stakol said of the deal: "The prospect of working with one of the UK's leading fashion retailers to accelerate the development of Lipsy is exciting.

"Next's sourcing, supply chain, systems and logistics are among the best in the industry and we look forward to working with Next's experienced management team."

Next chief executive Simon Wolfson added: "We are delighted to welcome Lipsy to the Next group and look forward to helping develop their business in the years ahead."

Leicester-based Next had revenues of £3.3bn (€4.2bn) and pre-tax profits of £498 million (€635) in the year to January 2008.