Is ASOS about to offload Topshop?
ASOS is reported to be in talks with Ted Baker's acquisitive US owner, Authentic Brands Group, to offload the Topshop brand.
Online fashion giant ASOS won the race to acquire the Topshop brand from the collapsed Arcadia group in early 2021 fending off interest from NEXT and Authentic Brands Group, which was interested in buying Topshop on a joint ticket with JD Sports.
ASOS paid a total of £265 million for the brand, plus £65 million for stock in hand and in progress. It had been very familiar with the Topshop brand and customer base, since it was both the biggest rival of its ASOS own label but also one of the brands sold on its ASOS.
The deal, which also included the Topman, Miss Selfridge and HIIT brands, meant the end of Topshop on the British high street and the closure of its much loved Oxford Circus branch, which is shortly to re-open as an inner-city brand of IKEA.
Topshop's former Oxford Street store
However the prospect of Authentic Brands Group finally landing the business, could mean a return to physical retail. The Telegraph first reported the news over the weekend but both parties have so far remained tight-lipped. The offloading of Topshop, however, would help shore up ASOS's finances and remove a distraction. Apart from a deal to sell the brand in Nordstrom stores in the UK and the unveiling of a new brand identity, ASOS hasn't really committed to Topshop in any meaningful way and its amalgamation into the main Topshop website, rather than leaving it as a standalone entity, has left it feeling somewhat lost.
In its initial bid for Topshop, Authentic Brands was planning to work with JD Sports who would run its UK stores on its behalf. Any tie-up with JD seems highly unlikely now since the sports giant has a new CEO in the form of Régis Schultz, who offloaded its fashion assets to rival group Frasers and is determined to remain focused on the sports market.
The move to offload Topshop comes as the future ownership of ASOS itself is under the spotlight. The listed UK group has caught the eye of Mike Ashley's Frasers Group who has slowly been amassing shares and now owns more than 20% (he's been building a stake in rival Boohoo also).
It is understood ASOS's largest shareholder Anders Holch Povlsen, owner of Bestseller and a Danish billionaire, is keen for it to remain listed and Frasers doesn't always make bids for companies in which it holds strategic stakes, but its targeting of ASOS and Boohoo has heightened speculation that it intends to make a move.
Furthermore, Frasers has today sold fast fashion business Missguided (acquired out of administration a year and a half ago) to Chinese behemoth Shein who plans to reignite the label in its first UK takeover deal. The deal also marks the start of a collaboration between Frasers and the Chinese group.
"We are also excited about the ongoing discussions around further collaboration between Frasers Group and Shein," said Frasers CEO Michael Murray as the deal was announced.
Topshop suitor Authentic Brands too has close ties to Shein and today has revealed it will be co-creating a line with Shein for US young fashion brand Forever 21 to be sold on Shein's platform. Shein, Authentic Brands and Forever 21 parent SPARC had previously announced a partnership deal in the summer, which saw Shein take a 30% stake in SPARC.
The various deals raise the possibility that both ASOS (through Frasers) and Topshop (through Authentic Brands) could both end up in some way under the control, or part control, of Shein.
Main image: Topshop AW23.
