Online fashion giant Boohoo has added struggling department store Debenhams to its business portfolio for a reported price of £55 million, reports have revealed.
The deal, however, will see all 118 Debenhams stores close, putting up to 12,000 jobs at risk.
Described as a “huge step” for its business, Boohoo confirmed this week that it has purchased the 242-year-old store’s online business and associated intellectual property for £55 million in cash.
The department store, whose flagship Oxford Street store is currently closed due to national lockdown restrictions, was put into administration last year after struggling with falling profits and rising debts.
Administrators, who suggested that the coronavirus pandemic had made Debenham’s position untenable, confirmed that many of its stores would not reopen.
The department store adds to Boohoo’s growing online portfolio, which also includes Oasis, Coast and Karen Millen, but not their associated stores.
Commenting on the deal, Mahmud Kamani, executive chairman at Boohoo, said: “This is a transformational deal for the group, which allows us to capture the fantastic opportunity as e-commerce continues to grow. Our ambition is to create the UK’s largest marketplace.
“Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion e-commerce, but in new categories including beauty, sport and homeware.”
Joint administrator Geoff Rowley said he had achieved the “best outcome for Debenhams’ stakeholders”.
“This transaction will allow a new Debenhams-branded business to emerge under strong new ownership, including an online operation and the opportunity to secure an international franchise network that will operate under licence using the Debenhams name,” he said.
According to the latest statistics, the UK apparel market declined by 15 per cent in 2020, while the UK online fashion market grew by 26 per cent. Likewise, some 55 per cent of all fashion products are now bought online, compared to 33 per cent the previous year.
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