Asos today bought Topshop and three other brands from the ashes of Sir Philip Green’s Arcadia empire for just £330million with experts telling MailOnline the fashion chain and its stock has been flogged ‘on the cheap’.
The online fashion retailer, which hopes the purchase will help it grow in the US, has bought the Topshop, Topman, Miss Selfridge and HIIT brands from administrators after winning a battle with rival Boohoo, who bought up Debenhams last week.
The sale will see 300 shops shut down overnight and 2,500 store staff lose their jobs, with many finding out they will be looking for a new job in 2021 after seeing ASOS’ announcement on TV or social media this morning.
But ASOS said today it will ‘look at’ saving Topshop’s flagship Oxford Street store, which would be its first and probably only high street store meaning the deal will leave more ‘big holes’ in UK’s ailing high streets as fast fashion companies hoover up retail brands.
The online fashion retailer, run by Scotland’s richest man Anders Holch Povlsen, worth £6.1billion, has bought the Topshop, Topman, Miss Selfridge and HIIT brands from administrators for £265million. They also paid another £65million for current and pre-ordered stock.
Topshop’s sale came after an extraordinary collapse of a brand that was the biggest fashion chain on the high street just a decade ago. The brand, which had showstopping collaborations with designers including supermodel Kate Moss who was pictured holding hands with Sir Philip when she helped open its New York branch in 2009 – Topshop’s first in the US.
In 2012 Arcadia Group was delisted from the London Stock Exchange when it was bought by Green’s Taveta Investments group for £850million. Its success contributed to him getting a knighthood and earning the nickname: ‘King of the High Street. Now Arcadia’s crown jewels have been sold for £330million including all its clothes and accessories.
Yesterday it was reported that Sir Philip Green’s family will get around £50million from the sale of Topshop – yet the shop’s 1,000 suppliers are expected to get less than 1 per cent of any cash owed to them.
Guy Elliott, retail analyst at consultancy Publicis Sapient. Guy, told MailOnline today: ‘Asos’ acquisition of Arcadia brands Topshop, Topman and Miss Selfridge is a quick move to acquire some valuable consumers and brand assets ‘on the cheap’. I think it is disappointing, and somewhat short-sighted that they are not keeping any of the brand stores. That to me, feels like a bad longer-term decision’.
Susannah Streeter, markets analyst at Hargreaves Lansdown, said: ‘The deal will leave big holes in high streets up and down the UK. The era of Topshop as a draw for young fashion conscious shoppers to town centres appears to be over’.
Topshop’s sale came as online brands such as ASOS and Boohoo enjoyed gigantic sales during the pandemic as physical stores were closed to stop the spread of Covid-19.
Boohoo, owned by Manchester billionaire Mahmud Kamani, bought the Debenhams brand for £55million last week and will axe up to 12,000 jobs by making it an online-only operation. Debenhams was valued at £1.7billion when it was floated on the London Stock Exchange in 2006 and made record profits by 2013. Last year its shares were worthless after recent annual losses approached £500million.
Mr Kamani and Blackburn-born billionaire brothers Zuber and Mohsin Issa, who made their £3.56billion from petrol stations and recently bought the supermarket chain Asda, were all trying to buy Topshop but were pipped by Asos who wanted to buy Arcadia’s other brands and were already selling their items online.
Sir Philip Green and Kate Moss attend the opening of a Topshop store in New York in 2009 at the height of its success when it was worth around £850million. Now the brand has been sold ‘on the cheap’ to ASOS for £330million including its piles of stock
Huge crowds outside Topshop when Kate Moss launched her fashion range – today the store is closed but ASOS is considering trying to save it
A man walks past a Topshop/Topman store on Princes Street in Edinburgh in December 2020 – 300 stores are set to go
ASOS, run by Scotland’s richest man Anders Holch Povlsen, left with with Anne and worth £6.1billion, beat rivals Zuber and Mohsin Issa, who made their £3.56billion from petrol stations, to Topshop
Boohoo owned by Mahmud Kamani (pictured left with Snoop Dogg, Boohoo CEO Carol Kane and his son Samir Kamani in 2018) bought Debenhams last week
The online fashion retailer, which hopes the purchase will help it grow in the US, has bought the Topshop, Topman, Miss Selfridge and HIIT brands from administrators.
Administrators for Sir Philip Green’s retail group said the buyer has also paid another £65million for current and pre-ordered stock.
The deal for Arcadia’s prized brands, which will be fully funded from cash reserves, does not include its stores – putting thousands of jobs at risk.
Asos told investors this morning that it will take on around 300 employees as part of the deal. The Asos share price gained 2.1 per cent in early trading today.
Sir Philip’s Arcadia empire fell into administration in November owing creditors hundreds of millions of pounds and threatening more than 13,000 jobs.
Its collapse was the biggest corporate failure of the Covid-19 pandemic so far. Topshop alone had around 300 stores open before the start of the pandemic.
A source close to the matter told AFP that the store closures would put 2,500 jobs at risk – and the deal is expected to complete on Thursday.
But Asos came under fire this morning from Arcadia staff who will lose their jobs, with many upset that the firm was ‘crowing on social media’.
Asos had tweeted: ‘The rumours are true… Topshop and Topman are now part of the Asos family.’
But one Arcadia employee said: ‘Nice way to find out I’ve lost my job, Asos, great move for the people.’ Another added: ‘Thanks for informing me I’ve lost my job, after 10 years. Very compassionate.’
And a third said: ‘It’s actually disgusting. I’ve worked for Topshop for two years and my own manager found out through Sky News as the administrators didn’t inform us.’
Arcadia’s administrators Deloitte confirmed to MailOnline that the overall deal is worth £330million.
Asos chief executive Nick Beighton told reporters on Monday that the company was ‘looking at’ the possibility of retaining Topshop’s flagship store on Oxford Street, but admitted it was ‘not a priority’.
‘It is something we are considering but we are not a stores business,’ he said.
‘Our priority is to double down on the brands, which we’ve seen perform incredibly well across our platform.’
Asos said the Topshop, Topman and Miss Selfridge websites will start re-directing customers to Asos from ‘Wednesday evening or Thursday morning’.
Mr Beighton said more clothing lines from the acquired brands will appear on its site from this period, with the first Asos-designed Topshop and Topman products expected to appear later in the year.
He added: ‘We are extremely proud to be the new owners of the Topshop, Topman, Miss Selfridge and HIIT brands.
‘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.’
An Asos spokesman said the four ‘iconic Arcadia brands would ‘resonate’ with its youthful customer base in Britain.
‘This acquisition represents a compelling strategic opportunity in support of our mission to become the number one destination for fashion loving 20-somethings worldwide,’ they said.
‘These are strong brands that resonate well with our core customer base. Brand equity is strongest in the UK and they have an established presence in both the US and Germany, two of our key strategic markets.’
And Asos chief executive Nick Beighton said: ‘We are extremely proud to be the new owners of the Topshop, Topman, Miss Selfridge and HIIT brands.
‘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.’
Asos said incremental core earnings from the deal in its 2020-21 year would be offset by initial ramp-up costs.
There would also be additional one-off restructuring and transaction costs of about £20million.
Last week, Boohoo said it was in exclusive talks to buy the Dorothy Perkins, Wallis and Burton brands in a move which will also not include any stores.
Asos said its acquisition of the four brands will ‘resonate’ with its core customer base of ’20-somethings’ in the UK.
The Asos distribution centre near Barnsley in South Yorkshire
Workers at the Asos distribution centre near Barnsley in South Yorkshire
The online fashion retailer has also bought the Miss Selfridge brand from administrators
The announcement comes after Asos-rival Boohoo said on Friday that it was in talks with Arcadia administrators to buy three of its brands comprising Dorothy Perkins, Wallis and Burton in a move which will also not include any stores.
If a deal is struck there it would complete the break-up of Sir Philip’s empire.
Established in 2000, Asos has grown quickly with its shares closing last Friday at 4,735p, valuing the business at £4.47billion.
Boohoo also agreed last week to purchase the intellectual property assets of failed department store chain Debenhams.
Both Arcadia and Debenhams collapsed in December – together risking the loss of 25,000 jobs – having struggled to transition from a bricks-and-mortar business long before the coronavirus pandemic forced shoppers online.
It comes after an industry group claimed last week that one fifth of shops on London’s Oxford Street are now boarded up with ‘no hope of recovery’ with more than 50,000 retail and hospitality jobs set to be lost when the third lockdown ends.
Some 57 of 264 stores on the world-famous road are already permanently shut with revenue falling by more than 80 per cent to below £2billion in the 12 months from March 2020 compared to the same period a year earlier.
The New West End Company, a lobby group which represents hundreds of businesses in the area and provided the data, warned that the ‘globally unique West End ecosystem is beginning to break down’.
Retailers have been hammered by three lockdowns as well as tier four restrictions which hit London one week before Christmas.
This British Retail Consortium graph shows shop vacancy in Britain – split by shopping centres, retail parks and high streets
The British Retail Consortium said the UK shops vacancy rate of 13.7 per cent was the highest since records began in 2012
A woman stands outside the shut and boarded up Debenhams on Oxford Street in London
Pedestrians walk past a series of closed shops on London’s Oxford Street last month
Its chairman Peter Rogers has urged Chancellor Rishi Sunak to provide further financial help – including targeted funding projects, extending a payment holiday on business rates and allowing tourists to reclaim VAT again.
He claimed that the West End, which is also known for being the centre of the capital’s theatre and entertainment industry, has suffered a tougher financial hit from the coronavirus pandemic than any other part of Britain.
Recent data from Springboard showed footfall is down 67 per cent year-on-year across Britain. This includes a 74 per cent fall on high streets, 75 per cent plunge at shopping centres and 45 per cent drop at retail parks.
The British Retail Consortium revealed last Friday that the UK high street has record levels of empty shops after 4,000 stores permanently shut their doors in the pandemic.
There are now approximately 40,000 empty premises across the UK, leading experts to warn the pandemic risks turning scores of high streets into ghost towns.
The BRC said the vacancy rate of 13.7 per cent was the highest since records began in 2012.
The figure has increased for ten consecutive quarters, from the start of 2018, when 11.1 per cent of premises were vacant.
The shift to online shopping, accelerated by the pandemic, and the sky-high cost of business rates has pushed thousands of businesses to the brink and forced a string of big name brands to shut shops.
Retail experts said the loss of big brands threatened the whole ecosystem of the high street.
Independent retail analyst Richard Hyman, a partner at TPC, said: ‘That vacancy rate is going to go much higher when the business rates holiday and furlough ends, leaving massive gaps on high streets up and down the country.
‘It’s hard to see who is going to come along and fill those gaps.’
The slow death of Oxford Street: How a FIFTH of stores in London’s iconic shopping district are now boarded up with ‘no hope of recovery’ after being hit by 80% revenue plunge in 2020
One fifth of shops on London‘s Oxford Street are now boarded up with ‘no hope of recovery’ with more than 50,000 retail and hospitality jobs set to be lost when the third lockdown ends, an industry group claimed today.
Some 57 of 264 stores on the world-famous road are already permanently shut with revenue falling by more than 80 per cent to below £2billion in the 12 months from March 2020 compared to the same period a year earlier.
The New West End Company, a lobby group which represents hundreds of businesses in the area and provided the data, warned that the ‘globally unique West End ecosystem is beginning to break down’. Retailers have been hammered by three lockdowns as well as tier four restrictions which hit London one week before Christmas.
Its chairman Peter Rogers has urged Chancellor Rishi Sunak to provide further financial help – including targeted funding projects, extending a payment holiday on business rates and allowing tourists to reclaim VAT again.
He claimed that the West End, which is also known for being the centre of the capital’s theatre and entertainment industry, has suffered a tougher financial hit from the coronavirus pandemic than any other part of Britain.
Recent data from Springboard showed footfall is down 67 per cent year-on-year across Britain. This includes a 74 per cent fall on high streets, 75 per cent plunge at shopping centres and 45 per cent drop at retail parks.
A boarded up and closed store on London’s Oxford Street as the retail sector continues to be devastated by the pandemic
A woman wearing a face mask walks past a boarded up and closed store on London’s Oxford Street as the crisis continues
A woman wearing a face mask stands outside the shut and boarded up Debenhams department store on Oxford Street
Pedestrians walk past closed shops on London’s Oxford Street although a Ben’s Cookies outlet (on the right) remains open
Mr Rogers told Bloomberg: ‘Left to market forces alone, the West End will recover but not for many years and not before irreparable damage will have been done to Britain’s global reputation.’
It comes as the British Retail Consortium revealed the UK street has record levels of empty shops after 4,000 stores permanently shut their doors in the pandemic.
There are now approximately 40,000 empty premises across the UK, leading experts to warn the pandemic risks turning scores of high streets into ghost towns.
The BRC said the vacancy rate of 13.7 per cent was the highest since records began in 2012. The figure has increased for ten consecutive quarters, from the start of 2018, when 11.1 per cent of premises were vacant.
The shift to online shopping, accelerated by the pandemic, and the sky-high cost of business rates has pushed thousands of businesses to the brink and forced a string of big name brands to shut shops.
Former high street titan Debenhams has been sold to online retailer Boohoo without its 124 department stores, meaning it will disappear from the high street completely.
And 400 Topshop stores face closure, putting 13,000 jobs at risk, after Sir Philip Green’s Arcadia empire went bust in December. Retail experts said the loss of big brands threatened the whole ecosystem of the high street.
Independent retail analyst Richard Hyman, a partner at TPC, said: ‘That vacancy rate is going to go much higher when the business rates holiday and furlough ends, leaving massive gaps on high streets up and down the country. It’s hard to see who is going to come along and fill those gaps.’
Helen Dickinson, chief executive of the BRC, said: ‘With the country in and out of lockdown, the forced closures of thousands of shops, and consumers reluctant to visit town and city centres, it is unsurprising that the number of shuttered stores continues to rise.
‘Over the past two years, one in every 50 outlets has permanently closed, and this number will only go up. The big increase in vacancy rates during the crucial Christmas quarter serves as a stark reminder of the pandemic’s impact.’
The British Retail Consortium said the UK shops vacancy rate of 13.7 per cent was the highest since records began in 2012
This British Retail Consortium graph shows shop vacancy in Britain – split by shopping centres, retail parks and high streets
A man wearing a face mask walks past a closed Sports Direct shop on Oxford Street as non-essential stores remain closed
A man wearing waterproof clothing walks past a boarded up and closed shop on London’s Oxford Street in the rain
A closed entrance to the Debenhams flagship store on Oxford Street in London, which is now permanently shut
The Centre for Retail Research found that just over 16,000 shops closed their doors in 2020, suggesting that around 12,000 premises were filled by other shops, or services such as nail salons and gyms.
Its director, Professor Joshua Bamfield, said: ‘It’s going to get a lot worse before it starts getting better. Bricks-and-mortar retailers have been hit hard by the lockdown, and every high street is probably going to have to shrink.
‘That’s the only way they can cope with stores closing. Many of the shop workers who are sitting at home may not have jobs to go back to. It’s harsh, but it’s the reality.’
In time shuttered stores may be converted into offices or homes. Last year John Lewis announced it was converting the upper floors of its Oxford Street shop into offices as it could no longer justify the space.
The pandemic has already ripped through the high street, leading many of the country’s best-known brands to shut stores.
People walk along Oxford Street next to shutters at the flagship John Lewis store as non-essential shops remain closed
A pedestrian walks past a sale sign at a JD Sports store on Oxford Street as non-essential shops are forced to remain closed
A closed sign in the window of a branch of McDonald’s on Oxford Street in London during England’s third national lockdown
A government coronavirus advert on the big screen at a near deserted Piccadilly Circus in London, pictured today
Boots expected to close 188 of its 2,600 stores last year, Hays Travel is shutting 89 stores and Paperchase is closing 37 of its 127 stores.
TM Lewin, Oasis and Karen Millen have disappeared from the high street entirely, while Cath Kidston has lost all but one of its 60 stores after falling into administration.
Marks & Spencer has long-standing plans to shut 85 department stores by 2024 as it tries to beef up its online business.
As many as 200,000 jobs were lost last year in retail, with many less being created in warehouses that service online shops.
Another 200,000 are expected to be lost this year as the business rates holiday comes to an end, threatening to push thousands of firms, which are currently unable to open, to the brink.
The rise and fall of Sir Philip Green’s retail empire: How Topshop and Dorothy Perkins owner Arcadia, which once paid out BILLIONS in dividends and signed up Kate Moss and Beyonce to sell its clothes, has collapsed
For three decades Sir Philip Green has ruffled feathers at the top of the British retail industry – clinching deals, incurring controversies and all while making eye-watering wealth.
He stood atop an empire in Arcadia, which boasted a stable of some of the most well-known brands in fashion, including Topshop and Dorothy Perkins.
But after years of making its stores a staple of high streets, Arcadia found itself a victim of its own success and collapsed as shoppers increasingly look online.
Philip Green with his wife Tina Green attend a Christmas party together at BHS Oxford Street in 2002
Sir Philip Green and Kate Moss open the Topshop and Topman flagship store in New York in April 2009
Sir Philip with Kim Kardashian (left) and Kourtney Kardashian (right) at Aqua in London on November 8, 2012
Sir Philip and Beyonce Knowles at Fashion Rocks in aid of the Princes Trust at the Royal Albert Hall in London in October 2003
The company has a 120-year legacy to which it traces its roots when 18-year-old Lithuanian immigrant, Montague Burton, borrowed £100 to launch the first Burton store.
But Sir Philip’s 18 years at the helm have been the most influential on the business.
By 2002 when the Green family acquired Arcadia for £850million, Sir Philip was already a major player in the industry having been chief executive of listed company Amber Day in the early 1990s.
He had also bought flagging store BHS in 200 and was adamant he could revive its fortunes.
Upon purchasing Arcadia, he immediately sold the company to his wife Tina Green who lives in Monaco, a tax haven, and continues as chairman.
In 2005 Sir Philip paid himself £1.2billion in dividends from Arcadia, more than four times the company’s pre-tax profit.
Nevertheless its crown and glory brand, Topshop, quickly became a runaway success and was popular among millennials after supermodel Kate Moss began designing outfits.
Sir Philip forged a personal friendship with Moss and has often been seen embracing her at lavish parties, as he has with other stars such as Naomi Campbell.
Looking to expand, Topshop opened its first store in the US in 2009 with a branch on Broadway in New York City, and other outlets in the Far East.
In 2012, when Arcadia sold a 25 per cent stake in Topshop to an LA private equity firm, it was valued at £1.4billion – for some cementing Sir Philip’s position as ‘King of the High Street’.
But by then the economic shocks of the 2008 financial crash and a failure to capitalise on the booming online market had started manifesting in bleak balance sheets across other parts of the company.
This led to one of the most memorable and controversial takeovers on recent history, when in 2015 Sir Philip sold ailing BHS to serial bankrupt Dominic Chappell for £1.
Just 11 months later the company finally collapsed and last year Chappell was sentenced to six years in jail for tax evasion during his time running BHS.
The collapse of BHS cost 11,000 people their jobs and, perhaps more controversially, the company left a pension deficit of around £571million.
The Pensions Regulator later said that Sir Philip’s main reason for the £1 sale a year before BHS’s collapse was to avoid the pension deficit that was hanging over the firm.
Sir Philip’s handling led calls for him to be stripped of his knighthood and in 2016 MPs passed a non-binding motion for it to be revoked.
He attempted to quell the fury by making a £363million payment into the BHS pension fund.
But demands for him to relinquish his knighthood were reignited in 2018 when he became the subject of sexual harassment and bullying allegations.
He was named by Lord Hain using parliament privilege as the individual who had taken out an injunction banning press reporting on the accusations.
The following year he was charged with four counts of misdemeanour assault in the United States after an Arizona pilates instructor accused him of repeatedly touching her inappropriately.
At the time the allegations emerged he was trying to steer Arcadia through choppy business waters.
Max Irons, Cara Delevingne and Sir Philip for the Topshop Fifth Avenue store opening in New York in Novemeber 2014
Anna Wintour and Sir Philip attend the Topshop Brompton Road store opening in West London on May 19, 2010
Sir Philip’s £100million superyacht Lionheart is pictured in Valletta, Malta, in November 2017
Sir Philip poses for a photograph following an interview inside the Topshop store on Oxford Street in London in 2012
Sir Phil with former prime minister Tony Blair at the opening of The Fashion Retail Academy in London in October 2006
In its 2018 accounts, it reported a £93million pre-tax loss compared with £164million profit the previous year.
Its statement at the time blamed a dramatic change in the retail landscape and fierce competition from online rivals.
In 2019 through a restructuring as part of a Company Voluntary Arrangement, the Group wound down 23 loss-making stores.
The squeeze on Arcadia from online sellers like PrettyLittleThing, coupled with being undercut by cheaper clothes from the likes of Primark only compounded the firm’s woes heading into the pandemic.
Sir Philip and Kate Moss at a Topshop show for London Fashion Week at the Open Air Theatre in Holland Park, London, in 2006
Sir Philip and Bernie Ecclestone at the Monaco Grand Prix race on May 16, 2010
Sir Philip and Nigella Lawson at the Vogue Magazine 90th Anniversary Party at the Serpentine Gallery in London in 2006
Sir Philip with his wife Tina (left) and Kate Moss (right) during London Fashion Week at the Natural History Museum in 2007
Sir Philip and Simon Cowell at a London Fashion Week party at Cafe Royal in London on September 2006
British online fashion group Asos has now bought brands including Topshop, Topman, Miss Selfridge and HIIT from Arcadia in a deal worth £330million which could put 2,500 jobs at risk.
The announcement comes after Boohoo announced on Friday that it was in talks with Arcadia administrators to buy three of its brands – Dorothy Perkins, Wallis and Burton.
Boohoo also agreed last week to purchase the intellectual property assets of failed department store chain Debenhams.
Both Arcadia and Debenhams collapsed late last year – together risking the loss of 25,000 jobs – having struggled to transition from a bricks-and-mortar business long before the pandemic forced shoppers online.