Boohoo makeover for Debenhams
ONLINE RETAILER TO RELAUNCH STORE’S WEBSITE AFTER £55M DEAL BUT SHOPS WILL SHUT FOR GOOD
ASIAN entrepreneur and Boohoo cofounder Mahmud Kamani will expand his fashion empire with the acquisition of high street retailer Debenhams after Boohoo bought the group’s intellectual property assets.
Debenhams, whose history dates to the late eighteenth century, will shut all its outlets, administrators for the collapsed group said on Monday (25), with the loss of around 12,000 jobs.
Online retailer Boohoo said its acquisition of Debenhams’ assets, including customer data, will cost it £55 million. It plans to relaunch Debenhams’ online platform, as Boohoo looks to lead the fashion ecommerce market by entering new areas, including beauty, sports and homeware.
“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,” Boohoo said in a statement.
“This makes it a top 10 retail website in the UK by traffic.”
Its chief executive, John Lyttle, added, “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.”
Lyttle said the deal will enable it to grow into new categories, including beauty, sport and homewares.
The Boohoo fashion empire includes Boohoo, Boohoo Man, Pretty Little Thing, Nasty Gal, Miss Pap, Karen Millen, Coast, Oasis and Warehouse. The brands primarily target 16-40-year-old consumers in the UK and abroad.
Kamani set up Boohoo in 2006 with Carol Kane after his father arrived in the UK from Kenya in the 1960s and set up a market stall in Manchester selling handkerchiefs and towels.
Using family connections in India to source garments, he went on to start a wholesale textiles business and founded brands Pinstripe, Starsign and Jogo.
This week’s Boohoo deal with Debenhams’ administrators, FRP Advisory, does not include any of the chain’s 124 stores or safeguard jobs.
Debenhams has been in administration since April and last month FRP said it was starting a liquidation process, putting 12,000 jobs at risk.
Debenhams’ stores are closed because of lockdowns, but once able to reopen FRP will conduct a stock liquidation before closing the sites permanently, the administrators said.
It is unclear whether retail group Frasers, which has been in talks with the administrators, will still snap up some Debenhams stores.
Frasers is headed by Mike Ashley, owner of Premier League football club Newcastle United and renowned for purchasing major retailers that have fallen from great heights.
Boohoo-rival ASOS, meanwhile, announced it was in exclusive discussions with the administrators of Arcadia about purchasing some of its brands, including
Topshop. Arcadia, one of the country’s biggest clothing retailers, fell into administration ahead of Christmas, putting at risk a further 13,000 roles.
Arcadia, whose brands sold also in Debenhams’ stores, blamed its demise largely on the coronavirus fallout.
However like Debenhams, Arcadia also struggled to make the transition into a leading online company.
ASOS on Monday said it was looking at buying the Topshop, Topman, Miss Selfridge and HIIT brands from Arcadia.
“The board believes this would represent a compelling opportunity to acquire strong brands that resonate well with its customer base.”
Sky News last Saturday (23) reported that ASOS could pay more than £250 million for the Topshop brand. Next pulled out of the contest last Thursday (21), saying it did not want to overpay.
Established in 2000 and 2006, respectively, ASOS and Boohoo are Britain’s biggest e-commerce success stories, ideally placed to tap into a generation of consumers who increasingly shop on mobile phones and communicate via social media.
ASOS quadrupled profit in the 2019-20 financial year. Boohoo posted a 51 per cent jump in first-half profit despite negative publicity over supply chain. Their stock market capitalisation have grown to £4.8 billion and £42 bn respectively.