Boohoo, a Manchester-based online fashion giant quite popular in the UK, has acquired London-based retailer Debenhams’ brand and other business assets including, all the in-house brands and websites in recent development. The company has paid a cash consideration of £55 million to acquire the global rights to Debenhams brands and its websites.
However, this is not the first time Boohoo bought a company that’s out of administration. Back in 2019, Boohoo bought online businesses of Karen Millen and Coast for £18.2 million.
12,000 jobs at risk
Post the acquisition, the 118 Debenhams stores will be closed, since Boohoo sees very little value in them as so much shopping is happening online. With the closure of stores, around 12,000 workers are likely to lose their job.
“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,” Boohoo’s CEO, John Lyttle, said.
Administration since April
The 243-year old Debenhams has been in Administration since April, and FRP said it was starting a liquidation process. Once Debenhams stores reopen, FRP will conduct a stock liquidation before closing the sites permanently. The closing down sale will continue in stores for several weeks until the stock liquidation is completed and the value of this stock will be retained for creditors.
Based out of London, Debenhams is a fashion and beauty retailer multi-channel brand that operates department stores offering women’s clothing, menswear, beauty, kids, and homeware products.
Geoff Rowley, Joint Administrator, and Partner of FRP Advisory said: “We are pleased to have secured the future for this great brand and to have created the opportunity for a new Debenhams-branded business to emerge in a different shape beyond the pandemic. I expect that the agreement with boohoo may provide some job opportunities but we regret that this outcome does not safeguard the jobs of Debenhams’ employees beyond the winding down period. We are very grateful that they have worked tirelessly through this very challenging period and will continue to support the closing down sale. I’d also like to thank the management team, who have worked very hard throughout to protect the business and support us in delivering the best outcome for stakeholders.”