// Boohoo buys Debenhams in a deal worth £55m
// The deal includes Debenhams’ brand, website and own-brand products across fashion and beauty
// This means Debenhams’ 118 remaining stores will shut down for good as it becomes an online-only operation
Boohoo Group has bought Debenhams out of liquidation for £55 million, in a deal that will allow the 242-year-old department store brand to survive but its stores will shut down for good.
Boohoo’s deal only includes Debenhams’ brand and other business assets including all the in-house brands and websites, and will see Boohoo take ownership of Debenhams’ ecommerce operations and products around the start of its next financial year in March.
This allows enough time for administrators to continue running closing down sales across Debenhams’ remaining 118 shops once they are allowed to reopen after Covid-19 lockdown restrictions are lifted.
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With all of Debenhams stores closing down permanently as part of the liquidation process, it is unlikely many of the remaining 12,000 jobs are likely to be saved.
Debenhams said “a thorough and robust process” had been undertaken by the administrators to achieve the best outcome for stakeholders, and stressed that the transaction does not affect Debenhams’ Magasin du Nord fascia in Denmark, which continues to operate independently.
Since it fell into administration last April, Debenhams’ had already announced significant job losses and store closures – including the recent announcement of six store closures, of which its flagship outlet on London’s Oxford Street is a part.
“We are pleased to have secured the future for this great brand, and to have created the opportunity for a new Debenhams-branded business to emerge in a different shape beyond the pandemic,” said Geoff Rowley, joint administrator and partner of FRP Advisory.
“I expect that the agreement with Boohoo may provide some job opportunities but we regret that this outcome does not safeguard the jobs of Debenhams’ employees beyond the winding down period.
“We are very grateful that they have worked tirelessly through this very challenging period and will continue to support the closing down sale.
“I’d also like to thank the management team, who have worked very hard throughout to protect the business and support us in delivering the best outcome for stakeholders.”
Boohoo said the deal represented a “fantastic opportunity” to target new customers and launch into the beauty, sports and homewares market for the first time.
The company highlighted how Debenhams has six million beauty shoppers and 1.4 million Beauty Club members.
“The group intends to rebuild and relaunch the Debenhams platform, helping further the group’s stated ambition to lead the fashion ecommerce market, and grow into new categories including beauty, sport and homeware,” Boohoo said.
In hints that it intends to take on the might of Amazon, Boohoo said it would create the UK’s largest marketplace across fashion, beauty, sport and homeware – expanding the range of products sold via Debenhams marketplace by maintaining current third party relationships and expanding further.
Debenhams’ own fashion brands will also be absorbed into Boohoo’s current portfolio and sold via the Debenhams website.
Boohoo chief executive John Lyttle said: “The acquisition of the Debenhams brand is an important development for the group, as we seek to capture incremental growth opportunities arising from the accelerating shift to online retail.”
Boohoo founder and executive chairman Mahmud Kamani said: “Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion eCommerce, but in new categories including beauty, sport and homeware.”
Boohoo has previously bought a number of well-known high street brands out of administration, turning them into online-only operations, including Oasis, Warehouse, Coast and Karen Millen.
with PA Wires