Online fashion brand Boohoo is set to buy collapsed department store group Debenhams in a cut-price £50million deal, insiders claim.
The deal would result in the closure of all of Debenhams’ remaining department stores and is expected to be announced in the next few days – but the retailers are yet to confirm reports.
Debenhams started a liquidation process last month after failing to secure a last-minute rescue sale, putting 12,000 jobs at risk.
Its administrator, FRP Advisory, has been continuing to talk with third parties over the potential sales of all or parts of the historic retail business.
The latest deal would still see all stores close, but the brand would belong to online retail giant Boohoo, The Financial Times reports.
Online fashion brand Boohoo is set to buy collapsed department store group Debenhams (its Oxford Street store, pictured) in a cut-price £50million deal, insiders claim
The latest deal would still see all stores close, but the brand would belong to online retail giant Boohoo (file image)
Boohoo is also understood to be in the running to purchase Topshop, Topman and Miss Selfridge after they too were placed in administration in a brutal year for Britain’s high streets.
The fast-fashion retailer – founded by Mahmud Kamani – was thrust into the spotlight this year following accusations its suppliers used sweatshop-style conditions in Leicester to produce cheap clothing during the Covid-19 pandemic.
Workers in a Leicester factory packing clothes destined for Boohoo were being paid far below the minimum wage.
Undercover reporters also found the factory operating during the city’s localised lockdown without social distancing measures in place.
The fast-fashion retailer – owned by Mahmud Kamani (pictured) – was thrust into the spotlight this year following accusations that its suppliers used sweatshop-style conditions in Leicester to produce cheap clothing during the Covid-19 pandemic.
The scandal caused the firm’s shares to plunge by £1.3 billion and prompted a wave of condemnation from politicians and members of the public.
But the company appears to have bounced back as wide-spread lockdown rules saw non-essential shops shut and shoppers rush to buy online.
Retail bloodbath: How the pandemic changed Britain’s High Street
The High Street has been hard hit by the coronavirus pandemic as people were told to stay inside for several national lockdowns.
High Street stalwarts such as Debenhams, WH Smith and Clarks did not escape the bloodbath.
In August 228-year-old business WH Smith said a dramatic fall in sales could force them to axe around 11 per cent of its workforce.
It was a grim announcement for an already hammered high street after hundreds of jobs were also cut at high street fashion chain M&Co.
The chain also announced the closure of 47 stores, taking the number of workers facing redundancy as a result of the Covid crisis above 100,000.
Within one week over the summer 651 roles were lost at Byron, 1,700 put at risk at DW Sports, 878 lost at Hays Travel and 1,100 put at risk at Pizza Express.
John Lewis cut a further 1,500 jobs, adding to the 1,300 axed when it permanently shut eight stores in July.
The retail giant was widely seen as a benchmark for High Street performance in the UK.
Lloyds Bank also announced their decision to make 1,070 more staff redundant on top of the 865 earlier in the pandemic.
Within the same 24 hours Marks & Spencer also reported its first loss in its 94 years as a listed company. The company had already cut 8,000 staff since March.
And Sainsbury’s also confirmed it would cut around 3,500 jobs across its Argos stores and supermarket meat, fish and deli counters, while Clarks shoes put the jobs of all 4,000 of its store staff on notice as part of its fight for survival.
Debenhams became one of the largest high street casualties at the end of last year after rescue talks with JD Sport fell through.
The chain had been in administration since April, but when any hopes of a rescue were dashed, it drew a line under 242 years of trading.
It followed a bruising year for the high street which saw Sir Philip Green’s Arcadia group also collapse.
Arcadia, which owns Topshop, Miss Selfridge, Dorothy Perkins and Burton, tipped into administration, putting 13,000 jobs at risk.
Arcadia’s concessions, including Topshop and Dorothy Perkins, were worth £75million-a-year in sales to Debenhams.
The collapse set off a domino effect, with JD Sports pulling out of talks to buy Debenhams.
Experts called the collapse of the two giants at the end of last year one of the most ‘devastating’ weeks in the history of British retail.
Up to 25,000 workers were put at risk of redundancy in the space of 12 hours.
The number of job losses was so large it equated to losing the entire labour force of the UK fishing industry overnight.
It came in addition to thousands of other job losses as a result of the pandemic, which has pushed businesses across all sectors to breaking point.
Peacocks and Jaeger, which are owned by the Edinburgh Woolen Mill Group, fell into administration last month, putting 21,000 jobs at risk.
Laura Ashley went bust in March while fashion giants Oasis and Warehouse fell into administration in April.
The stationery chain, which usually makes 40 per cent of its annual sales over November and December, was particularly hit by lockdown measures over the festive period.
Approximately 1,500 jobs and 173 stores are on the line for the retailer, who appointed accountancy firm PwC to handle the administration process.
It was announced at the start of December that all Debenhams stores were to close for good after last-ditch attempts to save the retailer failed.
It was today revealed that Asos has emerged as the frontrunner to buy Topshop, Topman and Miss Selfridge after they were placed in administration.
The online fashion retailer is keen to acquire the brands from the administrators of Sir Philip Green’s Arcadia Group – which also owns Dorothy Perkins and Burton.
Asos is competing against rivals including Boohoo Group, U.S. retailer Authentic Brands Group, which is working with JD Sports Fashion Plc, and Chinese fashion group Shein, Sky News reported.
Asos has become a contender in the race to buy Topshop, Topman and Miss Selfridge from the administrators of Sir Philip Green’s Arcadia Group. (Stock image)
It comes after the business tycoon’s Arcadia Group fell into administration and put 13,000 jobs and hundreds of stores at risk
However the company only wants to acquire the brands and not the stores – therefore casting speculation that a deal could put jobs at risk.
The company is currently in the lead to buy the Topshop brand for more than £250million, according to Sky.
The billionaire brothers Zuber and Mohsin Issa, who recently bought the supermarket chain Asda, have also been locked in secret talks to buy Topshop.
On Thursday, Retailer Next Plc said it had pulled out of the bidding for Topshop and Topman after it was unable to meet the price expectations of the collapsed fashion chains.
Administrators at Deloitte, who were drafted in to find bidders for the businesses following a slump in sales, are expected to sell the brands by next month.
Asos and the Arcadia Group told MailOnline they would not be commenting.
Last year the Arcadia Group, which runs 444 stores in the UK and 22 overseas, was hammered by store closures amid the pandemic.
The administrators said they would ‘asses all options available’ but would continue to honour all online orders and operate all of its current sales channels.
Retail trade union Usdaw said it would seek an urgent meeting with Arcadia’s administrators in an attempt to save jobs and ensure staff were treated fairly as Sir Philip’s retail empire went bust.
Business secretary Alok Sharma also said he would keep a ‘very close eye’ on the administrators’ report on director conduct, and pledged the Government would support the affected workers.
In a statement, Arcadia chief executive Ian Grabiner said at the time: ‘In the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe.’
He added: ‘This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders.
‘Our stores will remain open or reopen when permitted under the Government Covid-19 restrictions, our online platforms will be fully operational and supplies to all of our partners will continue.’
Last year the Arcadia Group was hammered by store closures amid the pandemic. (Stock image)
The group, which includes the Topshop, Dorothy Perkins and Burton brands, hired administrators from Deloitte after the coronavirus pandemic ‘severely impacted’ sales across its brands. (Stock image)
Meanwhile Matt Smith, joint administrator at Deloitte, said: ‘We will now work with the existing management team and broader stakeholders to assess all options available for the future of the group’s businesses.
‘It is our intention to continue to trade all of the brands and we look forward to welcoming customers back into stores when many of them are allowed to reopen.
‘We will be rapidly seeking expressions of interest and expect to identify one or more buyers to ensure the future success of the businesses.’
Earlier this month, Asos announced it would invest £90million in a new centre after annual profits quadrupled last year.
The retailer plans to open the centre in Lichfield, Staffordshire, within 12 months and will employ 2,000 people at the site over the next three years.
The 437,000 square feet, AEW and Allianz Real Estate joint venture warehouse at Fradley Park will open within 12 months and will be fully operational by 2023, Asos said in a statement.
Following its supply chain scandal last year, Mr Kamani, founder and group executive chairman, commissioned a report which was carried out by Alison Levitt QC.
The report found the firm had not intentionally profited from poor working conditions and low pay, and had committed no criminal offences – but it did identify ‘many failings’ and concluded Boohoo had not taken sufficient responsibility for those involved in producing its clothes.
Boohoo said 64 companies have been removed from its UK supplier list as a result.
Mr Kamani appointed Sir Brian Leveson, who chaired the public inquiry into the culture and practices of the press, to oversee Boohoo’s so-called ‘Agenda for Change’ with the accountants KPMG tasked with independently tracking its progress.
It has since published its first independent report by Sir Brian, which says Boohoo is making ‘excellent progress’ to put in pace Ms Levitt’s recommendations.