Fashion giant Next has added to its stable of brands with the acquisition of Cath Kidston for £8.5m.

Next, which has for some time been building a portfolio of brands to sell alongside its own collections, has agreed to acquire the brand name, domain names and intellectual property of CK Acquisitions from administrators after a pre-pack deal.

Next said the domain will be licensed back to the administrators for up to 12 weeks ”to effect stock clearance, prior to relaunch under the company’s ownership”.

Zelf Hussain, joint administrator and partner at PwC, said: “Cath Kidston is a well-loved lifestyle brand founded and I am pleased that it has been bought by Next who will make sure it continues to flower under their ownership. 

“The company has over recent years navigated through incredibly challenging market conditions including the pandemic restrictions, and most recently the decline in consumer spending driven by cost of living pressures and rising costs. 

“In the short term, its four stores will continue to remain open whilst operations are wound down. Sadly, there will be redundancies during this period of wind down and we will continue to support the staff  throughout this period.”

The retailer employs 125 people and has branches in London, Ashford, Cheshire Oaks, and York. They will remain open to trade down stock before closing permanently.

Next was reported earlier today by Sky News to be in advanced talks to buy Cath Kidston.

Cath Kidston, famous for its quirky designs, first fell into administration in 2020 and last year it was acquired by restructuring specialist Hilco. Talks about a sale have taken place with various parties in recent weeks and Next, which issues full-year results tomorrow, won control.

The acquisition of Cath Kidston is the latest in a string of deals done by Next. Over the past year alone, it has bought online home specialist and fashion player Joules. Next, which has been one of the most consistently successful retailers, is expected to post profits tomorrow of about £850m.

Cath Kidston was founded in 1993 and expanded overseas as well as in the UK before hitting trouble.