Nicholas Carroll
Associate Director - Retail, Nicholas Carroll has a particular flare for the grocery industry but analyses and writes in-depth reports on a range of UK and European retail markets.

ASOS has recently bought Topshop, Topman, Miss Selfridge and athleisure brand HIIT for £295 million. Expected to be completed on February 4th, the takeover will rescue 300 jobs, but will risk the future of 2,500 employees as the brands network of stores are not included in the rescue deal.

The deal will bring a significant blow to the high street. For many high streets this will mean key tenants leaving key units at a point where there is significant hesitancy around taking on physical retail space. Alongside this of course there is the human impact, with the removal of the physical stores affecting thousands of employees.

Source: Shutterstock

However, this is a business transaction and we must treat it as such, and it seems oddly symbolic that the darling of fashion retail in the 2000s was acquired by the darling of the 2010s – which did so much to disrupt and channel shift the youth audience of Topshop/Topman.

The price is one of the steepest we have seen for brand/online transactions, near five times what Boohoo paid for Debenhams last week. This tells us of the remaining value in these brands, and it is notable that ASOS says it has seen 40% growth in sales of these brands on its platforms in the past year. Of course the two brands are complimentary, with both seeing a core audience aged 16-24 and this will clearly help the transition.

What’s next?

Transition is what will be needed for Topshop/Topman. There will be areas of the business which naturally prove more challenging trading simply online, mens suiting for example, but there are also opportunities to reinvigorate the brand with new styling.

The difficulty is communicating this shift without physical retail, and it is why the rumours, albeit unlikely, of ASOS interest in the Oxford Street store, being handled through separate administrators, are so interesting. Such a deal would not make up for the impact of the loss of these brands across the UK’s high street, but it would give ASOS an exciting landmark store to truly mark the passing of the guard.