Online fashion giant boohoo has acquired Debenhams out of administration in a £55 million deal.
The group intends to rebuild and relaunch Debenhams’ online platform and grow into new categories including beauty, sport and homeware.
In December administrators said the iconic retailer would be wound down, with all physical shops closed and 12,000 jobs put at risk.
boohoo will not take on the running of Debenhams’ retail stores or any of its staff.
The 242-year-old business has an established online platform with approximately 300 million UK website visits a year, making it a top 10 retail website in the UK by traffic.
In its most recent financial year to 31st August 2020, the company generated gross transaction value of £1.524 billion and EBITDA of £12.7m. The online portion of the business generated approximately £400m of these revenues.
“This is a transformational deal for the group, which allows us to capture the fantastic opportunity as eCommerce continues to grow,” said executive chairman Mahmud Kamani.
“Our ambition is to create the UK’s largest marketplace. 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.”
boohoo has acquired all of the intellectual property assets – including customer data – of Debenhams Retail.
It plans to create the UK’s largest marketplace across fashion, beauty, sport and homeware, expanding the range of products sold and including boohoo’s existing portfolio within this.
Debenhams has 6m beauty shoppers and 1.4m ‘Beauty Club’ members. boohoo plans to continue to operate the current wholesale model, but will also look to add new beauty brands via the marketplace.
Debenhams’ own fashion brands will be absorbed into boohoo’s current brand portfolio and sold via the core Debenhams site and its own pureplay websites. boohoo plans to develop the platform for international markets in the future.
“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,” said boohoo CEO John Lyttle.
“We have developed a successful multi-brand direct-to-consumer platform that continues to disrupt the markets that we operate in.
“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.”
In order to allow for the winding down of Debenhams’ operations, the firm will continue to operate its website for an agreed period before the relaunch on boohoo group’s platform in Q1 FY22.
A licence has been granted to allow for the winding down of Debenhams’ retail stores – when they are in a position to reopen – for an additional period.