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JD Sports in talks with Authentic Brands Group about potential Topshop buy

Lauretta Roberts
13 January 2021

JD Sports is reported to be in talks with US group Authentic Brands with a view to partnering on a potential purchase of Topshop, the jewel in the crown of Sir Philip Green's collapsed fashion empire Arcadia.

Bids for the Arcadia brands are due within the next week and Authentic Brands' interest has been known for some weeks, but Sky News has reported that its bid could be carried out in partnership with the London-listed sports retail giant.

JD is not thought to be planning to table any bids for Arcadia's brands on its own but it believed that it could act as an operator of Topshop on behalf of Authentic Brands, which is also parent to names such as Juicy Couture and Barneys New York.

Authentic Brands is a one of a number of US groups said to be circling Arcadia with Next believed to fashioning a bid for Topshop in partnership with US investor Davidson Kempner. Meanwhile GIII Apparel, which is a proprietary owner and license holder for brands including DKNY, Tommy Hilfiger and Calvin Klein, is also said to be in the mix.

Others circling are said to include Mike Ashley's Frasers Group and Manchester-based online fashion giant Boohoo.

Analysts suggest the pairing of JD Sports with Authentic Brands Group, could be a good outcome for Topshop.

Emily Salter, Retail Analyst at GlobalData, says: “Topshop is the most lucrative brand up for sale in Sir Philip Green’s former retail empire, but it needs significant investment and a refreshed strategy to turn it around to emulate its heyday when teenagers flocked to the brand as it set the latest trends. JD Sports in combination with Authentic Brands, which owns a number of American retailers including Barneys, would have the best chance of doing so.

“JD Sports has proven its agility and ability to target young shoppers, reporting stellar revenue growth of c.5% in the 22 weeks to 2 January despite more temporary store closures. Additionally, it is a digital leader, expertise from which Topshop would benefit from as it will no doubt have suffered in 2020 from being an online laggard.

"A partnership of JD Sports and Authentic Brands would be more likely to lead to Topshop’s revival than a purchase by Next, as though Next has a leading digital proposition, its slightly older customer base means it may struggle to reinstate Topshop’s front of mind appeal among Gen Z and millennials. Though it is unclear whether this potential bid would include any stores, it is more likely to do so than an acquisition by the boohoo group, and though Topshop’s store estate is far too big, especially given the impacts of COVID-19, the brand would be sorely missed if it was to vanish from high streets altogether."

Topshop's flagship store on London's Oxford Street is being marketed separately from the brand. The sale of Arcadia's brands is being handled by administrator Deloitte, which is said to have placed a £200 price tag on it, while the lease of 214 Oxford Street is being marketed by Savills and Eastdil. Giving the timing of the lockdown in England and the likely sale of the Topshop brand in the coming weeks, it is unlikely the flagship store will reopen in its current guise after lockdown.

Before Christmas one Arcadia brand, plus size specialist Evans, was sold to Australia's City Chic Collective for £23m. The deal did not include any of its retail stores. The remaining brands to be sold are Dorothy Perkins, Burton, Wallis and Miss Selfridge.

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