Around 2,450 high street jobs lost as Boohoo buys Arcadia brands at ‘discount price’
The sale of Dorothy Perkins, Wallis and Burton to Boohoo has put 2,450 jobs at risk, as all of the Arcadia brands’ physical stores are set to close.
Deloitte, which was appointed as administrator to Sir Philip Green’s collapsed retail empire, announced today that Boohoo has bought the brands’ digital assets for £25.2m.
All 214 stores are set to permanently close following the deal.
The deal follows the sale of Arcadia’s Topshop, Topman, Miss Selfridge and Hiit brands to online retailer Asos for £330m, resulting in around 2,500 job losses.
Boohoo missed out on the Topshop sale, but recently bought Debenhams’ brand and website for £55m. Its decision not to rescue the stores could see 118 branches shut.
“Bargain hunt”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Boohoo’s bargain hunt has come up trumps again with the Dorothy Perkins, Wallis and Burton brands added to its basket at the red sticker price of £25.2m.
“This purchase is part of a grand master plan by Boohoo to become the UK’s largest retail marketplace and propel its international expansion.
“Central to that strategy was the acquisition of the Debenhams brand and its successful website. As with the Debenhams deal, Boohoo is only interested in the brands, seeing no value in the store estate as the shift to digital sales continues to accelerate.
“The rescue of the famous names, won’t help the prospects of at least 2,450 shop workers who are still facing redundancy.”
Reaching new customers
“The acquisition of the Dorothy Perkins, Wallis and Burton brands are unlikely to turbocharge its growth, but they are familiar names to the UK’s shoppers and Boohoo must clearly see an opportunity to squeeze some value out of them,” Russ Mould, investment director at AJ Bell, said.
The acquisitions will help Boohoo to expand its customer base, he said.
Mould said: “Burton’s clothes are hardly cutting-edge fashion and are best described as ‘functional’ so not exactly a natural fit for Boohoo which is trendier in style.
“Nevertheless, there will be plenty of people who don’t want the fuss of keeping up with the latest styles and so Boohoo’s acquisition of the Burton brand could see it reach a new type of customer, therefore expanding its reach. It should also help with its strategy of expanding its menswear proposition.
“One could argue that Dorothy Perkins is a more grown up, less edgy version of Topshop. This might appeal to some of its more conservative customers who have grown out of Boohoo’s styles. Wallis was a turnaround brand under Arcadia and typically aimed at 30 to 50-year olds, so another way for Boohoo to retain customers as they get older.”