Boohoo buys Debenhams brand and website for £55million, but the deal will not include saving Debenhams’ 118 stores
Online fashion retailer Boohoo has bought the Debenhams brand and its website for £55 million.
However, it says it will relaunch the department store as an online-only operation, and that the deal will not include saving 118 Debenhams stores, which are now expected to close permanently. It also means that up to 12,000 jobs at the department store chain are set to go.
Boohoo has already bought a number of High Street brands out of administration. It snapped up Oasis, Coast and Karen Millen.
Of the Debenhams purchase, executive chairman of Boohoo, Mahmud Kamani, said: “This is a transformational deal for the Group, which allows us to capture the fantastic opportunity as eCommerce 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 eCommerce, but in new categories including beauty, sport and homeware.”
The Debenhams website, as well as customer data, related business information and selected contracts, are included in the deal.
The company says there will be a ‘structured winding down of the business’ which will result in all stores being shut.
Boohoo said Debenhams was expected to relaunch on Boohoo’s web platform later this year.
The 242-year-old Debenhams chain was already in the process of closing down, after administrators failed to secure a rescue deal for the Sir Philip Green’s Arcadia Group. It fell into administration last November putting 13,000 jobs at risk.
When Debenhams listed on the stock exchange in 2011, investors valued it at £1.6bn. Boohoo, which was founded only in 2006, already has a stock market value of £4.4bn.
Debenhams has struggled for years with falling profits and rising debts, as more shopping has moved online. It called in administrators twice in two years, most recently in April.
Businessman Mike Ashley, who founded Sports Direct and also owns House of Fraser, had already made an offer for Debenhams after it was initially put up for sale in April. However the takeover offer, thought to be in the region of £125m, was rejected as being too low.
In a separate development, Asos says it is in “exclusive” talks to buy the Topshop, Topman, Miss Selfridge and HIIT brands out of administration.