Debenhams stores and jobs left out of Boohoo deal
Debenhams’ remaining stores will close
Thousands of Debenhams staff will lose their jobs after Boohoo, the online fashion retailer, confirmed that it is buying the brand and other assets from its joint administrators for £55 million, but will not be acquiring its stores.
Boohoo confirmed it will only be acquiring the brands and associated intellectual property rights. The transaction does not include Debenhams’ retail stores, stock or any financial services.
More than 10,000 jobs at the chain are at risk as the vast majority are store-focused roles.
Boohoo said: “Debenhams is a long-standing and leading UK fashion and beauty retailer with high brand awareness, and an established online platform with approximately 300 million UK website visits per annum.
“This makes it a top 10 retail website in the UK by traffic.
“The transaction represents a fantastic opportunity to grow the group’s target addressable market and increase the share of wallet opportunity through a new capital light and low risk operating model that is complementary to the group’s highly successful direct-to-consumer multi-brand platform.”
John Lyttle, boohoo CEO, said: “The acquisition of the Debenhams brand is an important development for the group, as we seek to capture incremental growth opportunities arising from the accelerating shift to online retail.”
Boohoo says it is a ‘fantastic’ deal
Debenhams is expected to relaunch on the group’s platform in the first quarter next year.
In order to allow for the winding down of Debenhams’ operations, Debenhams will continue to operate its website for an agreed period before the relaunch on the Group’s platform and a licence has been granted to allow for the winding down of Debenhams’ retail stores (when they are in a position to re-open) for an additional period.
The transaction will be financed through the group’s existing cash balance, which stood at £386.9m on 31 December 2020.
In Debenhams’ most recent financial year to 31 August 2020, its online business generated unaudited online net revenues of approximately £400 million, via the following operating models:
ASOS confirms Arcadia talks
In a further sign of the ascendancy of online retail, Asos has confirmed that it is in exclusive discussions with the Administrators of Arcadia over the acquisition of the Topshop, Topman, Miss Selfridge and HIIT brands.
The board said it believes this would represent a “compelling opportunity” to acquire strong brands that resonate well with its customer base.
However, it said there can be no certainty of a transaction and ASOS will keep shareholders updated as appropriate. Any acquisition would be funded from cash reserves.
Its offer is thought to be about £250m which is below a bid from Chinese firm Shein which said it would retain some stores, while Asos has no plan to take on any.