The online fashion retailer Asos is in exclusive talks to buy a number of the UK’s best-known high street brands including Topshop, Topman and Miss Selfridge.
The brands are part of Sir Philip Green’s fashion empire Arcadia, which collapsed into administration last year.
If Asos can seal a deal it is likely to be bad news for thousands of staff and the high street store network as it operates as an online-only business. Arcadia Group as a whole employed 13,000 staff and had 500 stores across the UK when it entered administration in November.
“Asos notes recent media speculation and confirms that it is in exclusive discussions with the administrators of Arcadia over the acquisition of the Topshop, Topman, Miss Selfridge and HIIT brands,” the company confirmed in a statement to the stock market.
“The board believes this would represent a compelling opportunity to acquire strong brands that resonate well with its customer base. However, at this stage, there can be no certainty of a transaction and Asos will keep shareholders updated as appropriate. Any acquisition would be funded from cash reserves.”
Asos shares rose 6% after the announcement on Monday. The Guardian first revealed on Friday that Asos had emerged as a serious contender to buy the Topshop brand.
Other bidders pursuing Topshop include Shein, a Chinese online fashion retailer; Authentic Brands, the US owner of the Barneys department store, which has been linked to a joint bid with JD Sports; and the billionaire Issa brothers, who in October announced they were buying Asda for £6.8bn.
“Asos would by far be the most complementary new owner for Topshop, Topman and Miss Selfridge,” said Chloe Collins, a senior analyst at GlobalData.
“The brands are already popular sellers through its third-party platform, proving that there is strong customer overlap, and Asos’s impressive global reach would help the Arcadia brands target new shoppers. The retailer’s digital prowess will aid the brands in gaining top-of-mind appeal, as they have so far fell behind online competition.”
Administrators have been seeking buyers for Arcadia’s brands, which also include Dorothy Perkins and Burton. Evans, its plus-size clothing brand, was sold to City Chic Collective, an Australian retailer, for £23m.
Arcadia’s high street rival Next, which was working with the US hedge fund Davidson Kempner, pulled out of the auction on Thursday. In a statement, the consortium said it had been “unable to meet the price expectations of the vendor” amid speculation that Topshop, Arcadia’s prime asset, could fetch between £250m and £300m.
On Monday, the online fast fashion retailer Boohoo announced a deal to buy the Debenhams brand but it does not include the 118 high street stores or the 12,000 staff.