Online fashion retailer Boohoo has acquired Debenhams Retail Limited from its joint administrators for 55 million pounds in cash. The company said in a statement that it intends to rebuild and relaunch the Debenhams platform, helping further the group’s stated ambition to lead the fashion ecommerce market, and grow into new categories including beauty, sport and homeware.
Commenting on the development, John Lyttle, Boohoo CEO, 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. The acquisition represents an exciting strategic opportunity to transform our target addressable market through the creation of an online marketplace that leverages Debenhams’ high brand awareness and traffic through the development of beauty and fashion partnerships connecting brands with consumers.”
Boohoo sees opportunity to expand reach through Debenhams acquisition
Debenhams is a leading UK fashion and beauty retailer with high brand awareness, and an established online platform with approximately 300 million UK website visits per annum. This makes it a top 10 retail website in the UK by traffic. The company added that the transaction represents a fantastic opportunity to grow the group’s target addressable market and increase the share of wallet opportunity through a new capital light and low risk operating model that is complementary to the group’s direct-to-consumer multi-brand platform.
Boohoo plans to create the UK’s largest marketplace across fashion, beauty, sport and homeware and plans to expand the range of products sold via the Debenhams marketplace by maintaining existing marketplace brand relationships and adding new brands over time. For beauty category, the group will continue to operate the current wholesale model, but will also look to add new beauty brands via the marketplace model, while Debenhams’ own fashion brands will be absorbed into boohoo’s current brand portfolio and sold via the core Debenhams site and their own pureplay websites.
“This is a transformational deal for the group, which allows us to capture the fantastic opportunity as ecommerce continues to grow. 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,” added Mahmud Kamani, Executive Chairman of the company.
Boohoo to relaunch Debenhams platform in FY22
Debenhams is expected to relaunch on the group’s platform in the first quarter of FY22. Debenhams will continue to operate its website for an agreed period before the relaunch on the group’s platform and a licence has been granted to allow for the winding down of Debenhams’ retail stores. The transaction does not include Debenhams’ retail stores, stock or any financial services.
In Debenhams’ most recent financial year to August 31, 2020, its online business generated unaudited online net revenues of approximately 400 million pounds and generated unaudited gross transaction value of 1.524 billion pounds and unaudited EBITDA of 12.7 million pounds.
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Image: Boohoo Facebook