Boohoo snaps up Arcadia brands to complete breakup of Green empire

British online fashion retailer Boohoo has bought the Dorothy Perkins, Wallis, and Burton brands from the administrators of Arcadia for 25.2 million pounds ($34.6 million), completing the breakup of Philip Green’s empire.

Like rival ASOS’ purchase last month of Arcadia’s prized Topshop, Topman, Miss Selfridge, and HIIT brands, Boohoo’s deal does not include any stores, concessions, or franchises.

Administrators Deloitte said all 214 Dorothy Perkins, Burton, and Wallis stores will permanently close. Some 260 head office staff will transfer to Boohoo, leaving 2,450 retail staff at risk of redundancy.

The deal on Monday, February 8, follows Boohoo’s purchase last month of the Debenhams brand out of administration for 55 million pounds. That deal also excluded Debenhams’ stores and its 12,000 staff. All Debenhams’ UK stores will permanently close this year.

“This is a great acquisition for the group as we extend our market share across a broader demographic, capitalizing on growth opportunities as more and more customers shop online,” said Boohoo’s executive chairman Mahmud Kamani.

The 3 brands generated revenue of about 428 million pounds across all channels in the year to August 29, 2020.

Shares in Boohoo were down 3.9% at 0840 GMT, with sentiment dented by speculation the UK government is considering an online sales tax. Shares in ASOS were down 2.9%.

While the internet has been reshaping the British retail landscape for more than a decade, multiple lockdowns to stem the spread of COVID-19 have accelerated the move to home shopping.

Arcadia 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 pandemic so far.

The administrators sold the Evans brand to Australia’s City Chic for 23 million pounds in December.

In total the administrators have raised more than 500 million pounds for Arcadia’s creditors, with the process to generate proceeds from the group’s property portfolio ongoing. – Rappler.com