The British fashion e-commerce darling has entered exclusive talks with the administrators of defunct Arcadia Group to acquire Dorothy Perkins, Wallis and Burton brands. If their offer is accepted by administrators at Arcadia Group, the e-tailer could boost its group annual sales by 500 million pounds.
“Boohoo Group confirms that it is in exclusive discussions with the administrators of Arcadia over the acquisition of the Dorothy Perkins, Wallis and Burton brands,” the company said in a statement Friday. “These discussions may or may not result in agreement of a transaction. A further announcement will be made when appropriate.”
In commentary gather by the ‘Financial Times’, Andrew Wade, analyst at Jefferies, said that while the brands were not viewed as the jewels in the crown of Arcadia, they nevertheless generated more than 500 million of annual sales between them. “These acquisitions would be very much consistent with Boohoo’s successful approach to date, and we would view the brands as a good fit within the group,” he said in a note to clients.
The market expects Boohoo to make an announcement regarding their acquisition of menswear brand Burton, which generates annual sales in excess of 120 million pounds on average. If Boohoo’s offer is accepted, Burton’s addition will boost the online retailer’s menswear offering. Noteworthy, BoohooMAN brand currently accounts for less than 10 percent of the group total sales. Boohoo offers about 25 million pounds for three of Arcadia’s brands
The online-only retailer is said to have offered circa 25 million pounds for the three Arcadia brands, and is reported to closed the physical stores and dramatically reduce the staff should its offer be accepted, reports the ‘Guardian’.
Boohoo shareholders quoted by SkyNews said the talks with Arcadia’s administrators “may or may not result in agreement of a transaction.” “A further announcement will be made when appropriate.” Boohoo has come reinforced from the coronavirus tsunami that has hit hard the UK’s apparel retail scene. Over the past year, the e-tailer group has acquired the Oasis, Coast and Karen Millen brands out of administration. It also has just purchased the Debenhams brand out of administration, paying 55 million pounds to buy the bi-centenary brand in a deal that will see the department stores disappearing from the UK’s high street and a likely loss of 12,000 jobs.