Fire sale: what next for British retail’s collapsed brands?
Boohoo snaps up Debenhams as Asos confirms talks to buy Topshop, Topman and Miss Selfridge
January usually marks a huge month in retail as shops sell off cut-priced stock ahead of launching spring lines. But this year it’s not the products that are for sale but rather the retailers themselves.
With non-essential outlets forced to close during Covid-19 lockdowns, total retail sales volumes fell by 1.9% in the UK in 2020 - the largest year-on-year decline since records began in 1997, according to Office for National Statistics (ONS) data.
Clothing retailers have “fared particularly badly”, says ONS deputy national statistician Jonathan Athow. The past year has seen the collapse of leading brands including department store giant Debenhams and the Arcadia Group, owner of outlets such as Topshop, Burton, Miss Selfridge and Dorothy Perkins.
However, newly emerging reports suggest shoppers may not have seen the last of Debenhams, Topshop, Topman and Miss Selfridge.
Boohoo buys Debenhams - but expect tears
Boohoo Group is shelling out £55m to buy Debenhams’ “online business” and “associated intellectual property”, the online fashion firm confirmed today. But while the acquisition includes the Debenhams brand and website, the 242-year-old chain’s 124 high-street stores are still set to close, with up to 12,000 job losses.
“Boohoo has already bought a number of high-street brands out of administration. says the BBC says. “It snapped up Oasis, Coast and Karen Millen, but not the associated stores.”
The portfolio of purchases are part of a campaign to take on Amazon as a leading player in the online retail market. Boohoo chief executive says Debenhams will operate as a digital “shop window” for his company’s brands and third party retailers, The Guardian reports.
The stock market appears confident that plan can yield good profits, with shares in Boohoo jumping by nearly 4% when the Debenhams deal was announced this morning,
Executive chair Mahmud Kamani said: “This is a transformational deal for the group, which allows us to capture the fantastic opportunity as e-commerce continues to grow. Our ambition is to create the UK’s largest marketplace.
“Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion ecommerce, but in new categories including beauty, sport and homeware.”
Debenhams is expected to relaunch as an online-only brand on Boohoo’s web platform in the first quarter of 2022, the group said in a statement to investors.
Asos eyes Arcadia brands
HuffPost warned in December that the coronavirus pandemic had claimed its “biggest retail scalp so far”, as Arcadia Group collapsed into administration.
The demise of Philip Green’s empire left more than 13,000 jobs at risk as stores including Topshop, Burton, Miss Selfridge and Dorothy Perkins prepared to shut up shop for good.
But now Asos is claiming to be in “pole position” to snap up the most valuable Arcadia brands, Sky News reports.
In a statement issued today, the online fashion retailer said: “Asos plc notes recent media speculation and confirms that it is in exclusive discussions with the administrators of Arcadia over the acquisition of the Topshop, Topman, Miss Selfridge and HIIT brands.”
The proposed deal represents a “compelling opportunity” to buy “strong brands that resonate well with its customer base”, the statement continues.
“However, at this stage, there can be no certainty of a transaction and Asos will keep shareholders updated as appropriate.”
Continuing that more downbeat note, pundits say that major job losses are on the cards even if a purchase is agreed.
Any deal for the Arcadia brands would “likely result in all stores facing closure and redundancy for most of the 13,000 staff”, the BBC reports.