Fallen department store giant Debenhams is to be reborn as an online bazaar under the ownership of 15-year-old Boohoo, which has bought the brand out of administration for £55m.
Boohoo is not acquiring any of Debenhams’ stores, stock or financial services, but is absorbing all its intellectual property assets, including its brand portfolio and its customer data.
It will facilitate the winding down of the stores by allowing them to continue to use the brand for a short time, but its focus is on the opportunity it sees in the Debenhams ecommerce business.
The sense of a wider changing of the guard is accentuated by the news that online retailer Asos has entered exclusive discussions with the administrators of Arcadia over the acquisition of the Topshop, Topman, Miss Selfridge and HIIT brands.
It now appears less likely the Arcadia empire will survive in offline form, with Next having pulled out of the bidding process late last week.
However, Asos indicated it was likely to retain the Arcadia brands, which it said were “strong”, and “resonate” with its own customer base.
Similarly, Boohoo sees Debenhams’ “high brand awareness” as an asset it can capitalise on by relaunching the department store’s ecommerce website in 2022. It plans to retain the Debenhams "marketplace" strategy of selling both its own and third-party brands.
Debenhams is in the top 10 online retailers by traffic in the UK and made approximately £400m in online net revenues in the financial year to 31 August 2020.
Boohoo also highlighted Debenhams’ six million beauty shoppers and 1.4 million Beauty Club members, adding that this gave the mainly clothing-oriented Boohoo portfolio another market to expand into, as well as sport and homewares.
John Lyttle, chief executive of Boohoo, 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.
“We have developed a successful multi-brand, direct-to-consumer platform that continues to disrupt the markets that we operate in. The acquisition represents an exciting strategic opportunity to transform our target addressable market through the creation of an online marketplace that leverages Debenhams’ high brand awareness and traffic through the development of beauty and fashion partnerships connecting brands with consumers.”