Boohoo, the online retailer which snapped up the Debenhams brand this week, has confirmed “exclusive” talks to buy remnants of Sir Philip Green’s Arcadia empire.
Sky News revealed on Thursday night that Boohoo was leading the race for the Dorothy Perkins, Wallis and Burton brands and was prepared to pay around £25m.
Any deal would complete the downfall of Sir Philip‘s sprawling retail interests and result in the closure of all 444 stores.
That is because Boohoo – like fierce rival ASOS, which is locked in negotiations over the most valuable parts of Arcadia including Topshop – also has no plans to take on any physical sites amid COVID-19 chaos on the high street.
It places 13,000 Arcadia jobs in peril on top of more than 10,000 at Debenhams, which is also set to see stores shuttered once stock clearances are completed ahead of a pure digital future.
Boohoo said on Friday: “The group confirms that it is in exclusive discussions with the administrators of Arcadia over the acquisition of the Dorothy Perkins, Wallis and Burton (excluding HIIT) brands.
“These discussions may or may not result in agreement of a transaction. A further announcement will be made when appropriate.”
Boohoo shares were 1% down at the open.
Analysts at Jefferies Equity Research said of the potential deal: “While not viewed (or priced) as the ‘jewels in the Arcadia crown’, Dorothy Perkins, Wallis, and Burton are well-known brands that in the year to Sep-18 generated a sizeable £580m of revenue between them.
“These acquisitions would be very much consistent with boohoo’s successful approach to date, and we would view the brands as a good fit within the group, particularly given the recent Debenhams deal, through which all three traded.”
Boohoo issued the update as industry figures compiled by the Local Data Company showed retail store vacancy rates already at record levels in the three months to December amid a tough Christmas season.
Physical stores deemed non-essential retail, such as fashion, saw a stop-start 2020 as a result of pandemic restrictions.
The British Retail Consortium has warned the situation is only going to get worse as current lockdowns continue.
It has demanded further government support for the retail sector including an extension to the business rates holiday beyond April.
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