Fat Face boss Anthony Thompson has said the stock market is suffering from “retail IPO indigestion” after the fashion retailer last week abandoned plans to float.

Thompson told Retail Week it was the right decision for the business to withdraw. “There’s no question that the valuations of the retail sector have softened,” he said. “Everyone has got to get their heads around it, there is a lot of IPO activity.”

The decision to withdraw was about “recognising that the market has dramatically changed,” he added.

Fat Face scrapped plans for a float last week, citing “current equity market conditions” as the key factor.

Sceptics have questioned the growth stories of some retailers coming to market amid eye-watering valuations. Card Factory, Ao.com, Pets at Home and Poundland have all launched IPOs in recent months, and all have lost value since floating.

Fat face was hoping to raise £110m from its IPO, valuing it at more than £400m, which it planned to use towards paying off debt and opening new stores. Thompson said the store opening programme would continue as planned and that he would remain “100% focused on great product, service and store environment”. Thompson said he would not rule out a future IPO or additional funding from elsewhere but said it was too early to say at this stage.

Private equity firm Bridgepoint owns 70% of Fat face. The rest is owned by management, employees and former employees. Former Marks & Spencer boss Sir Stuart Rose is Fat face’s chairman.