Boohoo buys Debenhams brand and website but all stores will close
Online fashion giant Boohoo has bought the Debenhams brand and website for £55m in a deal that will see the department store name survive, but the company’s remaining 118 stores close for good.
The deal will result in Debenhams products being sold by Boohoo from early next year, allowing enough time for liquidators to continue closing the retailer’s sites once they are allowed to reopen after Covid-19 lockdown restrictions are lifted.
But with stores closing across the 242-year-old brand, it is unlikely many of the remaining 12,000 jobs are likely to be saved.
Debenhams had already announced significant job losses and the permanent closure of six stores, including its flagship outlet on London’s Oxford Street.
Boohoo said the deal represented a “fantastic opportunity” to target new customers and launch into the beauty, sports and homewares market for the first time.
The company highlighted how Debenhams has six million beauty shoppers and 1.4 million Beauty Club members.
It said: “The group intends to rebuild and relaunch the Debenhams platform, helping further the group’s stated ambition to lead the fashion e-commerce market, and grow into new categories including beauty, sport and homeware.”
In hints that it intends to take on the might of Amazon, Boohoo said it would create the UK’s largest marketplace across fashion, beauty, sport and homeware – expanding the range of products sold via Debenhams marketplace by maintaining current third party relationships and expanding further.
Debenhams’ own fashion brands will also be absorbed into Boohoo’s current portfolio and sold via the Debenhams website.
Boohoo chief executive John Lyttle said: “The acquisition of the Debenhams brand is an important development for the group, as we seek to capture incremental growth opportunities arising from the accelerating shift to online retail.”
Founder and executive chairman, Mahmud Kamani, added: “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-ommerce, but in new categories including beauty, sport and homeware.”
Boohoo has previously bought a number of well-known high street brands out of administration, turning them into online-only operations, including Oasis, Warehouse, Coast and Karen Millen, and its management team is highly incentivised to grow the business further.
The Manchester-based group had been considered an early favourite to acquire the Topshop brand from Sir Philip Green's collapsed retail group Arcadia, however it has emerged this morning that rival online fashion group ASOS is now in exclusive talks to secure the coveted brand.
Boohoo's acquisition of Debenhams is something of a surprise move and it had been expected that Mike Ashley's Frasers Group might be able to secure a deal to buy the chain and retain at least some of its stores, but the longer negotiations dragged on for, the less likely that outcome seemed.
Debenhams began liquidation proceedings in early November, a day after Arcadia - its largest concessionaire - announced its administration.