Having bagged the online business and brand assets of Debenhams for £55 million earlier this week, online fashion retailer Boohoo (BOO:AIM) is in talks to acquire the Dorothy Perkins, Wallis and Burton brands from the ashes of Philip Green’s failed Arcadia empire.

Responding to media reports, Manchester-based Boohoo has confirmed it is in ‘exclusive discussions’ with Arcadia’s administrators to purchase the Dorothy Perkins, Wallis and Burton brands, news that sent the shares up 1.4% to 38.6p on Friday.

‘These discussions may or may not result in agreement of a transaction’, explained Boohoo in a short statement, adding that a further announcement will be made ‘when appropriate’.

COMPLETING THE CARVE-UP

Boohoo is thought to be prepared to pay about £25 million to get its hands on this trio of brands, though it isn’t in the market for the HIIT brand sold at Burton, which arch-rival ASOS (ASC:AIM) is looking to take on.

Any deal would complete the carve-up of Green’s retail empire, which is being carved up by the two AIM-listed online giants.

On Monday, Boohoo snapped up Debenhams’ online assets for £55 million, while its web-based fast fashion rival ASOS announced it is seeking to cherry-pick the Topshop, Topman, Miss Selfridge and HIIT athleisure brands from Arcadia.

Boohoo and ASOS are both online pure-plays and have no desire to take on any brick and mortar stores at a time when the shift online and the upheaval created by Covid-19 are hammering the high street.

This is why the Debenhams and Arcadia deals will result in the shuttering of hundreds of stores and the loss of many thousands of retail jobs.

NEW VERTICAL

Buying Debenhams allows deal-hungry PrettyLittleThing owner Boohoo to shift into a new vertical market in beauty, which should resonate with the retailer’s core customer.

In recent years, Boohoo has moved into an older age demographic with the acquisition of the brand rights and intellectual property of Karen Millen, Coast, Warehouse and Oasis.

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Issue Date: 29 Jan 2021