(Adds CEO comment, Bridgepoint details)
LONDON May 1 British clothing chain FatFace is to list on the London Stock Exchange in a float that could value the company around 440 million pounds ($743 million) and help it cut debt ahead of its expansion into North America.
The company, owned by European private equity group Bridgepoint said on Thursday it aimed to raise 110 million pounds through the IPO, joining other British retailers like Poundland and Pets at Home who have listed this year to take advantage of firm equity markets.
FatFace had adjusted core earnings (EBITDA) of 31.2 million pounds in its 2013 financial year. It has 208 stores with 316,700 square feet of retail space across the UK - not enough, said Andrew Thompson, its chief executive.
"What we want to do is grow it. We want to go abroad," he said, adding the firm would set up a dedicated U.S. website and open two to three shops on the east coast of the United States over the next 12 months.
Bridgepoint paid 360 million pounds for FatFace in 2007 from rival private equity firm Advent, but the investment has proved difficult as the retailer struggled to find its niche. Bridgepoint subsequently injected three further investments of 25 million pounds each.
FatFace, known for its outdoors activewear, recently abandoned attempts to target younger shoppers and returned to its middle-aged core market - guided by former Marks and Spencer head Stuart Rose, who joined it as chairman in 2013.
FatFace, whose two founders began by selling T-shirts from a VW campervan in the French Alps, will use the new capital from the IPO to cut debt to 60 million pounds and reduce associated bank costs and fees.
Bridgepoint's 2007 investment in FatFace, which Thompson said was split equally between debt and equity, was part of the private equity house's 2.5 billion euro European Fund III. Bridgepoint launched its latest fund, the 4.8 billion euro European IV, in 2009.
The sale will be led by Citigroup and Jefferies, with Canaccord Genuity as lead manager and Lazard as financial adviser.
Bridgepoint declined to comment. ($1 = 0.5922 British Pounds) (Reporting by Freya Berry; Editing by Sophie Walker)