Ritika Janiya
Big news for fashion fans: Topshop might soon be back on the high street! ASOS, the online fashion giant which bought Topshop a few years ago, has just sold a big chunk of the brand. Here’s the scoop: ASOS sold a 75% share of Topshop for £135 million to a company called Heartland-which is part of Bestseller. Bestseller is an online shopping website, powered by the Danish billionaire Anders Povlsen, who also owns several popular brands such as Jack & Jones and Vero Moda.
Why the Big Change?
Why would Asos sell such a big part of Topshop? Firstly, to pay some of the debts. Asos has been having quite a hard time lately. Sales dropped more than they actually expected; probably, this happened because of a rainy summer and high energy bills. Because of these factors, people spent less money than usual.
What’s Next for Topshop?
With the majority now owned by Heartland, what does that mean for the brand? Well, it could mean we start to see Topshop stores launching again on our high streets. José Antonio Ramos Calamonte, chief executive of Asos, said a new Topshop website will be live by next summer. He is optimistic that with Bestseller’s experience of operating stores and selling into major department stores, Topshop can once again grow in popularity.
Currently, Topshop only exists online and in a handful of Nordstrom department stores. With Bestseller in the fold, there’s a pretty good chance we could see a few new stores donning Topshop’s name. For now, however, “we have no concrete plans to share regarding store count,” said Calamonte.
What Does This Mean for Asos?
While the online retailer Asos is offloading a major stake in the high street brand Topshop, it’s not letting go of the brand cold turkey. Asos will continue selling Topshop and Topman products, but this time around, it will have to pay Bestseller a royalty. It’s a charge that would likely knock £10m-£20m off this year’s profits at Asos.
The Numbers Game
The deal values Topshop at £180m, slightly below the £265m Asos paid for it back in 2021. That original price was £330m, including £65m of stock. Asos will keep a 22.5% stake of Topshop and its partner Nordstrom holds just over 2%. Heartland will possess the rest.
Thanks to this sale, Asos’ debt, which was £348 million back in April, would be reduced by around £150 million. In yet another debt-related move, Asos also issued £250 million of new bonds and is buying back old ones. The likely impact of this would be to remove some of the short-term concerns about indebtedness at Asos.
Big Picture?
The deal, according to Calamonte, will enable Asos to focus on offering the best products for its customers while providing growth for the company in a sustainable and profitable manner. With Topshop being increasingly available and enhancing its product quality and creative direction, he believes, the brand will then have a better position.
The decision to sell Topshop came after receiving offers from various companies; Bestseller had been chosen because they seemed like the best fit to make Topshop more available to customers.
Look to the Future
What does this all mean for Topshop enthusiasts? It could well spell a return of Topshop to high streets, or at least more presence than has been the case in recent times. With Bestseller bringing years of experience with running physical stores and the new website plans, Topshop might be building up to a big comeback.
In all, with the new plans for its return to the high street, the future of Topshop looks brighter, besides positive improvements on its online business. This move by Asos to sell off most parts of the brand to Bestseller was a strategic approach in debt management, with a time preference to grow the business in new ways.
