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Will ASOS hang on to Topshop as Shein and ABG encroach?

Chloe Burney
18 April 2024

ASOS continues to receive "non-stop interest" from high-profile retailers, including Shein and Authentic Brands Group (ABG), to take Topshop off its hands.

ASOS, which is in the midst of a turnaround plan, was last year reported to have been considering the sale of Topshop to help cover growing debts, however, this never came to fruition. Now, it has garnered fresh interest from ABG and reignited interest from Shein.

The e-tailer purchased Topshop from the administrators of Sir Philip Green’s collapsed Arcadia Group for £330 million in 2021. At the time, it beat the competition, including rivals NEXT, Shein and Frasers Group.

As one of ASOS' top-performing brands, Topshop is considered a "valuable asset" within the retail industry.

Despite turning down previous offers, ASOS may reconsider as it falls deeper into the red. In 2018, the e-tailer was valued at upwards of £6 billion, which was more than rivals Marks & Spencer and NEXT. However, its shares have since fallen by 94%, in contrast to NEXT'S which have risen by 71% during the same period.

Just yesterday, ASOS published its financial report. The company revealed widening losses after half-year sales plunged by nearly a fifth as it presses ahead with "necessary action" to turn the business around, including the appointment of a new CFO. It posted underlying pre-tax losses of £120 million for the six months to 3 March against losses of £87.4 million a year ago.

Shein’s renewed interest in Topshop comes as it proceeds to expand its presence in the UK. Last month, it opened a debut pop-up shop at Liverpool ONE. This comes after the company recently opened a hub in Manchester, which is the home of the UK fast fashion industry, housing HQs for the likes of Boohoo and In The Style.

Shein recently made headlines for being in talks to list an IPO on the London Stock Exchange. It was initially reported that Shein was in talks with London Stock Exchange bosses at the end of last year. Should it go ahead in London, the Shein float would be one of the biggest blockbuster IPOs in the UK in many years.

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