Pureplay UK online retailer, ASOS, has snapped up Arcadia Group's Topshop and other brands, which filed for administration late last year. The deal excludes physical stores, driving further digital growth.
ASOS, the leading online fashion retailer, has acquired Topshop, Topman, Miss Selfridge and HIIT brands for a total £295 million ($528.49 million).
The retailer will also spend a further £30 million ($53.73 million) for the stock, bringing the total acquisition price to more than £300 million.
This transaction excludes the physical stores throughout the UK, leaving thousands of jobs in the air as ASOS drives its digital offering for the newly-acquired brands.
ASOS will acquire approximately 300 jobs in the transaction, including design, purchasing and retail partnerships.
It comes as other traditional brick-and-mortar retailers across the UK are being bought out by other digital leaders, such as Boohoo, which recently acquired the struggling department store, Debenhams, for $100 million.
“We are extremely proud to be the new owners of Topshop, Topman, Miss Selfridge and HIIT brands,’ said the CEO of ASOS, Nick Beighton. This monumental purchase further solidifies the place of e-commerce in the modern retail landscape.
“This move is a market-share land grab,” shared Aneesha Sherman, an analyst at Sanford C Bernstein.
Last week, Power Retail reported the collection of retailers that were after the Arcadia Group stable of brands, including Next, Shein and Boohoo.
ASOS currently houses Topshop, Topman, Miss Selfridge and Burtons on its platform, which has experienced skyrocketing sales in 2020. The acquisition aims to further accelerate the pureplay retailer’s multi-brand platform strategy, Beighton said in a statement.
“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,” he said.
The retailer has also played an instrumental role in developing the acquired brand’s digital presence, which will be further expanded with the acquisition.
“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 with key strategic retail partners in the UK and around the world,” Beighton explained. “This deal makes perfect sense for us on every level,” he said.
ASOS is funding the deal with cash reserves, with a statement that its cash position remains strong.
During Christmas, Topshop and Topman sales went through the roof, jumping 41 percent. In 2019, the combined brands collectively earned revenue of $1.79 billion. There are plans to continue selling the newly-acquired brands through third-party sellers, Beighton confirmed.
“This is a strategy that is already working extremely well,” he shared. “The brands are great but they were sitting in a business with distress.”
In an interview with the BBC, Beighton shared that ASOS was the ‘natural owners’ of the stable of newly-acquired brands.
“There was a lot of competition and we’re really pleased we eventually came through and won the brands,” he told the BBC.
“We think we’re the natural owners for these brands. We know these customers and we know this market. We have the best designers in London and really I think these brands sit naturally on the ASOS platform.”
Despite the successful acquisition, Beighton said he doesn’t express the acquisition as a victory for the retailer, with any other emotions ‘not appropriate’.
These feelings come as the history of the Arcadia Group retailers were once considered the leaders in British high street retail.
“The most important thing for us has been getting this business acquired, transferring 300 people over and continuing to build our business,” he commented. “Any other emotions are not appropriate.”
Like this story? Click here to find out more about Power Retail E-Commerce Intelligence or here to sign-up for the free weekly Pulse Newsletter for more essential online retail content.