In a surprising turn of events, Topshop and Topman could soon make their return to the high street following Asos’s decision to sell a 75% stake in the fashion brand to Heartland, a subsidiary of the Danish fashion conglomerate Bestseller. The deal, valued at £135 million, marks a significant shift in strategy for the online fashion retailer and could breathe new life into the iconic British brand. Asos acquired Topshop just over three years ago for £330 million after the collapse of Sir Philip Green’s Arcadia empire.
The latest transaction values Topshop at £180 million, reflecting a considerable decrease from its initial purchase price. Despite this reduction, the deal is seen as a positive move for Asos, which has been grappling with declining sales and mounting debts. The sale to Heartland, controlled by Danish billionaire Anders Povlsen, who is also a major Asos shareholder, is expected to help the online retailer repay a substantial portion of its debts. Asos’s net debt, which stood at £348 million in April, is anticipated to decrease by approximately £150 million as a result of this transaction.
José Antonio Ramos Calamonte, Asos’s chief executive, expressed optimism about the deal, stating that a dedicated Topshop website would be relaunched by next summer. He also hinted at the possibility of reopening physical stores, leveraging Bestseller’s extensive experience in operating high street outlets and wholesale partnerships with department stores. The market responded positively to the news, with Asos shares surging by 20% following the announcement.
However, the company cautioned that its profits would be impacted by £10-£20 million this year due to royalty fees it will now pay for selling Topshop and Topman items on its website. This strategic move comes at a crucial time for Asos, which has been struggling to adapt to changing consumer behaviours post-pandemic. The company has been working to improve its fashion credentials and reduce excess inventory as shoppers return to physical stores. With this deal, Asos aims to refocus on its core business while allowing Topshop to potentially flourish under new management with a possible high street presence.
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