Topshop finally has a new owner.
In a major changing of the guard, British online retailer Asos has snapped up the high-street label alongside sister brands Topman, Miss Selfridge and HIIT, in a deal worth £295 million ($411 million).
Asos will pay £265 million for the brands and a further £30 million for their inventory, but the deal excludes any associated stores. It concludes months of speculation over the future of a brand that once ruled the high street, after parent company Arcadia Group entered administration in November.
The acquisition is the latest in an emerging trend of digital retailers snapping up ailing brands from once dominant high street groups. Last week, ultra-fast-fashion e-commerce group Boohoo bought struggling British department store Debenhams for £55 Million. Like the Asos-Topshop deal, all brick-and-mortar stores were left out of the transaction.
The deal puts thousands of jobs at risk — Asos said just 300 positions across design, buying and retail partnerships would be transferred into its ranks.
The acquisition of Topshop and its sister brands is intended to bolster Asos’ position in an increasingly competitive marketplace, as digital rivals like Boohoo consolidate their position and build out their own empires through M&A.
Asos already stocks Topshop on its site, which targets a Gen-Z and Millennial demographic. But while the retailer has a substantial wholesale business, selling Topshop alongside a range of labels including Nike, Tommy Hilfiger and & Other Stories, it’s also been dialling up its own-label business. Bringing the Topshop brand into the Asos fold is a further chance to bolster the retailer’s own margins.
“Asos already has some of these brands on its site, it knows how Topshop sells to existing customers for instance, and can stop those sales going to a competitor,” Maureen Hinton, global retail research director at GlobalData, previously told BoF.
Asos also said it sees “significant scope” for strategic retail partnerships, especially in the US via Topshop’s tie-up with Nordstrom.
Meanwhile, the competition is continuing to increase the pressure: last week, Boohoo confirmed it is in talks to buy up the remaining brands in Arcadia’s portfolio, which include Burton, Dorothy Perkins and Wallis.