ASOS reportedly exploring Topshop sale: who would buy?
ASOS is considering selling Topshop
Sky News said it’s in the early stages of the process and there’s no certainty that a sale will actually happen. It’s also unclear how much the brand might be worth at present and whether any talks with potential buyers have yet taken place.
ASOS bought Topshop in the wake of the Arcadia failure in early 2021, along with Topman
It followed that up by striking a deal for Nordstrom
The most intriguing thing is who might buy the business if it is eventually sold.
Bidders who were interested in late 2020 will clearly be expected to take part. They include NextReissJoulesAuthentic Brands GroupTed Baker
JD Sports
And then there’s BoohooSheinM&S
And of course, we can’t leave out Frasers Group. It’s a serial acquirer of brands, although it’s known to favour buying them cheaply, which could be an issue if ASOS wants a premium price for what’s a major UK name. But Frasers is a big shareholder in ASOS itself, which may or may not be significant. There’s been talk that its stake-building in both ASOS and Boohoo might be connected to an eventual bid or an attempt to merge them.
What’s most intriguing is that some of these potential bidders operate physical stores, raising the prospect of Topshop, Topman and maybe the other labels returning to the high street. That could happen either as part of a multibrand set-up or even via monobrand stores.
Would physical stores make sense though? Some of the problems e-tailers like ASOS and Boohoo have faced in the last 18 months or so is that consumers have returned more enthusiastically to in-person shopping than expected so a new owner opening Topshop stores wouldn’t be a shock.
Indeed, the physical stores recovery has prompted some surprising developments, such as news last week that e-tailer The Range is going to open physical spaces for the Wilko brand it just acquired in an apparent online-only deal. And labels such as Monsoon and Jigsaw
But why would ASOS actually want to sell brands that it has owned for a very short time? It had seemed heavily committed to the business with it launching a “bold new visual identity” for Topshop and Topman around a year ago.
But the confidence it had during and immediately after the pandemic — when e-tailers were riding high — has ebbed away. The company has faced major challenges in recent periods, reporting losses, its share price plummeting and it resorting to raising new financing earlier this year.
