Asos buys Topshop brands for £330m but 2,500 jobs to go

Topshop branch on Oxford Street in London. Photo: Yui Mok/PA Images via Getty Images
Topshop branch on Oxford Street in London. Photo: Yui Mok/PA Images via Getty Images

Online retail giant Asos (ASC.L) confirmed it had sealed the deal to buy Arcadia brands Topshop Topman, Miss Selfridge and sportswear brand HIIT for a total £330m ($453.4m).

The administrators Deloitte said that Asos will pay approximately £295m for the brands, goodwill and stock on hand, and will also take on certain liabilities for forward committed stock orders.

Asos will acquire the brands, intellectual property and inventory, however, excluding the high street foot print of 70 leasehold sites.

Approximately 300 employees across design, buying and retail partnerships will transfer to Asos, leaving around 2,500 jobs in the balance.

When Arcadia collapsed, it threw the future of 13,000 jobs into doubt.

The deal is expected to complete on 4 February and follows the sale of Evans to City Chic on 23 December for £23m last year.

The administrators said that the process to secure new owners for Burton, Dorothy Perkins and Wallis remains ongoing via exclusive discussions with a potential purchaser.

Asos shares ticked up 2.5% at market open, buoyed by the news.

READ MORE: Topshop sale likely to earn Sir Philip Green's family '£50m'

Asos said the sale was “strategically compelling opportunity to acquire four strong, iconic fashion brands,” and that it resonated “with our core customer base.”

It also said it is underpinned by an existing global warehouse and technology infrastructure.

The sale was fully funded from Asos cash reserves and there would be an additional one-off restructuring and transaction costs of around £20m.

Nick Beighton, Asos CEO, said: “The acquisition of these iconic British brands is a hugely exciting moment for ASOS and our customers and will help accelerate our multi-brand platform strategy.

“We have been central to driving their recent growth online and, under our ownership, we will develop them further, using our design, marketing, technology and logistics expertise, and working closely with key strategic retail partners in the UK and around the world.”

On Friday, online fashion retailer Boohoo (BOO.L) also confirmed “exclusive talks” and is leading the race to snap up Dorothy Perkins, Burton and Wallis for an estimated £25m.

Any deal would be for the brands and not the high street stores, and could wrap up Green’s remaining retail interests and the closure of all 444 stores in his retail empire.

Last week, Boohoo also sealed a deal to buy the Debenhams brand and website for £55m. But, the deal does not include the retailers remaining 118 shops leaving around 12,000 jobs at the 242-year-old department store at risk.

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