Brait, an investment vehicle of the retail magnate Christo Wiese, has bought 90 per cent of the chain, which trades from more than 800 stores. The rest of the business will be owned by the family of Tom Singh, who founded the business in 1969, and other senior management.
The company, which has stores in 21 countries, is being sold by buyout firms Apax and Permira, who will also pass on about £1 billion of debt. The buyout firms took their stakes in the retailer in 2004.
New Look had planned to list on the stock market in 2010, but the move was shelved amid turmoil in the financial markets. Its return to the stock market has been the subject of intense speculation in the City ever since.
Brait said it was buying the business for its strong earnings, its large UK high street presence and its growth prospects in France, Germany, Poland and especially China which is a priority market.
It added that New Look’s chief executive Anders Kristiansen would remain with the business.
Brait chief executive John Gnodde said: “New Look is an attractive investment opportunity for Brait – it is a market leading brand, with a strong track record of double digit earnings growth.”
New Look chairman Paul Mason added: “This is an ideal outcome for New Look. The Brait team demonstrated to us that they have the long-term vision to help Anders and the team grow this brand.”
Wiese has been linked with a string of UK retail takeovers in recent years, including a bid for department chain BhS, formerly owned by Sir Philip Green.
Brait also bought a controlling stake in the Virgin Active gym chain for just under £700m last month.
One of Wiese’s other investment vehicles, Pepkor, is in the process of launching Pep & Co, a new discount fashion chain in the UK, with Andy Bond, the previous boss of Asda.
It plans to open 50 stores creating 500 jobs by the end of the summer.
Retailing analyst and consultant Nick Bubb said: “The long-suffering private equity investors, Apax and Permira, were desperate to sell, after no less than 11 years of ownership, and an IPO never looked a runner (given New Look’s very chequered UK history and the unproven Chinese potential), so Christo Wiese has probably been able to drive quite a hard bargain.
“Whether New Look’s recent revival can be sustained is another matter, given the surplus capacity in the UK fast fashion market… and the new competition coming in the form of Christo Wiese’s own new UK discount fashion venture, Pep & Co.”