Asos bought Topshop out of administration in 2021 in a ￡330m deal - Julian Simmonds
Topshop is poised to return to the high street after a Danish rival of the retail tycoon Mike Ashley won control of the business.
José Antonio Ramos Calamonte, the chief executive of Topshop’s former owner Asos, said new store openings would be “considered for sure” following the sale of a majority stake to Anders Holch Povlsen.
Anders Holch Povlsen has agreed to pay ￡135m for the 75pc stake in Topshop - Bo Amstrup/Ritzau Scanpix
Mr Povlsen, who is Scotland’s biggest landowner and also owns brands including Jack & Jones, has agreed to pay ￡135m for the 75pc stake in Topshop through Heartland, which is part of his Bestseller business.
Asos will hold on to a minority stake and will pay a royalty fee to continue selling Topshop products on its website. A separate Topshop website will also be launched.
He added: “It allows us to realise some of the value or investment in Topshop, while also driving growth and participating in the future upside of the brand.”
The cash is expected to be used to pay down debts, with analysts estimating that net debt would fall by about ￡150m. Its debts stood at around ￡348m in April.
News of the deal triggered a share price rally, with Asos jumping more than 20pc on Thursday. Shares in the company were trading at their highest level since last September.
It will, however, be viewed as a move which sidelines Mr Ashley, the Frasers billionaire who has been vying with Mr Povlsen to forge deeper ties with Asos.
Mr Povlsen’s Bestseller is Asos’s largest shareholder while Mr Ashley’s Frasers Group sits in second position, having first revealed a stake in 2022.
Insiders have suggested that Mr Ashley was particularly interested in getting his hands on Asos’s Topshop brand, which he viewed as the crown jewel in Sir Philip Green’s collapsed retail empire Arcadia.
Asos bought Topshop out of administration in 2021 in a ￡330m deal. Excluding stock, the deal was worth ￡265m and included other brands such as Miss Selfridge. Frasers had been among those considering buying Topshop in the earlier process.
Nick Bubb, a retail analyst, said he expected Mr Ashley to be “displeased” at the deal with Mr Povlsen, adding: “That’s the bit of Arcadia he wanted, but Asos say there was an open competitive process, implying that he had a chance to bid himself”.
Mike Ashley, the Frasers billionaire, has been vying with Anders Holch Povlsen to forge deeper ties with Asos - Jamie Lorriman
It follows years of clashes between Mr Ashley and his Danish rival. In late 2020, when Scotland’s oldest department store Jenners collapsed, both blamed each other for its demise.
The pair butted heads again last year at Asos when Frasers offered to make a further investment when the online fashion firm was struggling with a cash crunch. Asos instead opted for a share placing underwritten by Mr Povlsen’s company and fellow shareholder Camelot.
City sources suggested Asos had kicked off the latest process to find a buyer for Topshop amid pressure to free up cash, attracting interest from the likes of Chinese fast fashion firm Shein and Forever 21 owner Authentic Brands Group.
Asos has been struggling with sliding sales, including at Topshop where there has been a decline of around 15pc.
Asos kicked off a turnaround drive last year, saying nothing was off the table in the battle to revive the business. In November, it mothballed a ￡90m warehouse that it had opened just two years earlier.
Dave Murray, the chief financial officer of Asos, said there had been a number of offers for Topshop and it had openly consulted with shareholders.
He said work had been under way to make sure the deal was “fair to all shareholders involved”, in an attempt to ward off concerns over a potential conflict of interest in selling the brand to a business controlled by its largest shareholder.
Asos does not need to go to shareholders for approval over the deal, although it is subject to antitrust approvals.
Mr Povlsen’s offer is understood to have been particularly attractive as it allows Asos to continue selling the Topshop brand online, drawing customers who only visit its website for pieces from the brand.
Speaking on Thursday, Mr Ramos Calamonte said the new joint venture would be focused on making Topshop “more accessible” to shoppers, adding that new stores could be on the horizon.
He said: “There’s no question that Topshop and Topman both have a big heritage of being present on the high street, so we will see.”
Over the past few months, there has been speculation that Asos is starting to scope out potential sites to relaunch Topshop into stores, with Carnaby Street pointed to as a possible location. Bosses sought to dampen rumours on Thursday, saying it was not looking at particular sites.
Topshop closed its stores in late September 2020, including its flagship Oxford Street shop. The location, which is being taken over by Ikea, has yet to reopen following construction work that discovered leaky basements. Ikea has pushed back the opening twice. It is now expecting to launch the store in spring next year.
