Fresh evidence of the permanent shift in the power-base of British retailing will emerge this week when Boohoo Group, the online fashion giant, buys the former high street stalwarts Oasis and Warehouse.
Sky News has learnt that Boohoo could announce the purchase of the two brands as soon as Wednesday morning, when it is scheduled to announce first-quarter results.
The deal will come just two months after Oasis and Warehouse Group collapsed into administration.
They were sold to Hilco Capital, the distressed retail investor, in late April, with nearly 2,000 jobs at the chains lost when their stores were closed for the last time.
City sources said on Tuesday that Oasis and Warehouse’s online business and their associated intellectual property would be bought by Boohoo.
The price being paid for the brands was unclear, although an insider said it was “considerably less” than the £18m Boohoo paid for Coast and Karen Millen in August 2019.
One retail analyst pointed out that the latest purchase by Boohoo would reunite a quartet of brands which had previously been under common ownership since the 2008 financial crisis left a failed Icelandic bank as their custodian.
If confirmed, the deal will bring the number of brands within Boohoo’s fast-growing empire to nine, and is expected to seek to continue a successful track record of integrating other acquisitions.
The customer profile of the Oasis and Warehouse is closer to Karen Millen and Coast’s 25-45 year-old age bracket than the younger appeal of the group’s other brands.
Last month, Boohoo struck a long-awaited deal to buy the minority interests in PrettyLittleThing, a retailer of women’s fashion, for up to £324m.
The transaction was announced just days after a hedge fund called Shadowfall claimed that the deal could cost Boohoo more than three times as much.
Most of the 34% PrettyLittleThing stake that Boohoo intends to buy is owned by Umar Kamani, the brand’s chief executive and the son of Mahmud Kamani, Boohoo’s co-founder and chairman.
A person close to Boohoo said the outlay on the Oasis and Warehouse brands would “hardly make a dent” in the £197m of fresh equity the company recently raised from shareholders for further acquisition opportunities.
“There will be more deals to come,” the person said.
Boohoo, which was set up in 2006, now has a market value of almost £4.7bn, making it more than double the size – in market capitalisation terms – of Marks & Spencer.
The deployment of Boohoo’s firepower on a number of fashion brands which have enjoyed a standalone presence on UK high streets for decades further underlines the rapid change taking place in the industry.
That structural shift towards online-only retailers is being accelerated by the trauma caused by the coronavirus pandemic, with many chains being forced into radical restructurings.
Since the outbreak of the virus, Cath Kidston, Debenhams and Laura Ashley have collapsed into insolvency processes.
Other chains, including New Look, have embarked on desperate bids to persuade landlords to agree sharply reduced rent deals.
Boohoo declined to comment on Tuesday.
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