Fashion eCommerce platform Asos has today announced that it is in exclusive talks with administrators Deloitte to acquire Sir Philip Green’s retail empire – Arcadia Group.
Asos plans on buying Arcadia’s high street brands including Topshop, Topman, Miss Selfridge and HIIT.
A statement on Asos’ website read: “ASOS plc notes recent media speculation and confirms that it is in exclusive discussions with the Administrators of Arcadia over the acquisition of the Topshop, Topman, Miss Selfridge and HIIT brands. The Board believes this would represent a compelling opportunity to acquire strong brands that resonate well with its customer base. However, at this stage, there can be no certainty of a transaction and ASOS will keep shareholders updated as appropriate. Any acquisition would be funded from cash reserves. ”
Following this announcement, the firm also released a short statement to the London Stock Exchange (LSE).
It said: “The board believes this would represent a compelling opportunity to acquire strong brands that resonate well with its customer base. However, at this stage, there can be no certainty of a transaction and Asos will keep shareholders updated as appropriate. Any acquisition would be funded from cash reserves.”
Much like today’s acquisition of Debenhams by boohoo, there are reportedly no plans for Asos to have a physical presence on the high streets across the UK – putting thousands of jobs at risk. Arcadia employs 13,000 people across the UK and has 444 shops.
Green’s Arcadia Group fell into administration in November 2020 due to the impact of the Covid-19 pandemic and customers’ shift towards online retail.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
ASOS entered into exclusive talks with Arcadia Group to cherry pick the popular brands TopShop, Top Man, Miss Selfridge and the fitness range HIIT. ASOS clearly wants to just scoop up the cream from Sir Philip Green’s retail trifle, leaving the more unappetising remains left out for others to pick over. Brands like Burton and Dorothy Perkins are likely to be a much harder sell, in a very competitive mid-market.
If the ASOS deal goes through as well, it means great swathes of the high street will be left empty. Spaces in prime locations are likely to be snapped up, but large shells of stores in towns and cities up and down the country are likely to stay boarded for some time. Bricks and mortar rivals like Next, Marks and Spencer and House of Fraser could benefit from the lack of high street competition, but with fewer stores to go to town for, it’s not going to help footfall bounce back once lockdown ends.
Matt Bird, Founder of The Shirt Society
An eCommerce giant like ASOS acquiring Arcadia Group’s brand like Topshop and Miss Selfridge – once stalwarts of the British high street – is indicative of the trend away from bricks and mortar retail.
The shift towards online-only retail has been accelerated as a result of the pandemic, and we may yet see more physical stores close in favour of strong eCommerce offerings. At The Shirt Society, we’ve found that many of our customers find physical store shopping an inconvenience, and retailers must address this and improve the shopping experience in order to survive.
Fashion retail has always been a traditionally ‘top-down’ business, with a small number of elite fashion houses dictating trends to high street stores. In the digital age, it feels like the balance of power is shifting back to the consumer.
Building a two way dialogue has seen brands like ASOS enjoy success where traditional retailers like Topshop have struggled.