Asos has swooped on Arcadia’s Topshop, Topman, Miss Selfridge and HIIT brands in a bid to reach new heights with the iconic names under its umbrella

  • Asos acquires Arcadia’s Topshop, Topman, Miss Selfridge and HIIT brands for £265m
  • Pureplay lays out plans to build on the strengths of each brand alongside its own labels
  • Chief executive Nick Beighton says “never say never” regarding the fate of Topshop Oxford Street flagship

The collapse into administration last year of Sir Philip Green’s Arcadia empire rocked the high street but today’s deal should give the flagship Topshop brand and its stablemates a new lease of life.

Nick Beighton

Source: Peter Searle

Nick Beighton: ‘We know these brands well and we’re confident in our plan’

Competitors for control of Topshop are understood to have included Next, Boohoo, Chinese etailer Shein, Frasers Group and American business Authentic Brands. But pureplay fashion giant Asos ultimately managed to secure the prime brands for £265m and has ambitions to build them back up to their former glories.

“The acquisition of these iconic fashion brands is an exciting moment for Asos,” says chief executive Nick Beighton. 

“It’s a compelling opportunity to acquire four strong brands that are a completely natural fit with Asos. 

“We know these brands resonate with our core, fashion-loving 20-something customers, both in the UK and internationally.

“We know these brands well and we’re confident in our plan to leverage our market-leading capabilities in design, merchandising and marketing, and our strong operational platform to take these brands to the next level of development.”

Integration and aspirations

Over the coming days, Asos will welcome 300 former Arcadia employees to the fold, joining its team of buyers, merchandisers and designers to work together and build the new-look brands.

New products designed under Asos’ ownership may not arrive on its platform until late spring/summer but the Topshop, Topman and Miss Selfridge websites will be closed for business from Wednesday and visitors redirected to Asos.

Asos is confident in the deal because it knows what it is buying, having already traded the brands on its site.

“Acquiring these new brands is an opportunity to celebrate our venture brand strategy with an increase in choice, an increase in styles, an increase in price points and product strengths, in addition to our Asos brands portfolio,” Beighton says. 

“Building these brands into our model also allows us to transform them into digital-first and they will benefit from our leading online experience. In short, this deal makes perfect sense for us on every level. It is our customer and we can overlay what we do best and drop them on to our platform.

“The brands have continued to grow when traded through the right channel with the right partner and the right model,” he explains. “While their own online proposition undoubtedly had room for improvement, it still grew at 5% during 2020.” Arcadia’s retail partnerships, such as with Nordstrom, grew 16% “supported by strong international multichannel partners”, and on the Asos site grew 41%.

Playing to brands’ strengths

Asos has built up its own stable of brands including Collusion, Asos Design, Asos 4505, and most recently, AsYou, but Beighton is excited to benefit from the brand equity the new arrivals have.

“This time, rather than building a brand from scratch, we’re beginning with a great customer awareness and a strong brand history,” he says.

“We know there’s more we can do with these brands to make them more relevant.”

Topshop iPad

Asos plans to make the former Arcadia brands digital-first

Asos has identified the strengths and weaknesses of each of its newly purchased brands to set out a plan of action for the next few months.

Beighton has tagged Topshop as fitting its “scenester” customer persona with particular strengths in denim and day dresses. Asos sold 500,000 and 300,000 such Topshop items respectively last year.

What Topshop and brother brand Topman lack is “inclusive sizing”, which Asos plans to address, as well as revitalising both brands’ footwear divisions.

For Miss Selfridge, which is aimed at a younger audience, Asos plans to retain an entry price point lower than that of its own Asos Design label, but augment its offering by adding a tall range to complement the petite offering.

Asos also plans to create Miss Selfridge products for every milestone in a young woman’s life such as proms.

HIIT is a less well-known brand, which used to be part of Arcadia’s Burton business. 

The activewear label has already resonated well with Asos’ customers – sales on the platform accounted for 80% of the brand’s revenues last year.

Activewear has been a fast-growing category throughout lockdown and Asos aims to expand HIIT to include more menswear and add premium technical and performance products for a greater range of sports activities.

The four acquired brands will sit alongside Asos’ own labels, complementing them by increasing the number of styles, price points and choice for customers overall.

“These brands are such a natural fit for Asos and our model, and they provide an opportunity to accelerate our strategy,” Beighton maintains.

“Asos was the largest digital partner and we know how they resonate with our customer, and we know how our customers shop with them. 

“We’re very clear on their strengths, and we’re very clear how we strengthen them and grow them further.”

Clicks and bricks?

An aspect Asos is unclear on, however, is the fate of Topshop’s famous Oxford Street flagship – Beighton is coy about the possibility of keeping it open.

Social distancing Topshop

Asos will ‘take a look’ at Topshop’s Oxford Street flagship

“Because we own the IP, we have the ability to trade the brands through any channel we want,” he says.

“We were approached about whether we were interested in taking the Oxford Street store. 

“We think that it is an iconic fashion store in London and one that we all love.

“It’s not our core model to take stores, nor our core strategy, but never say never. We said we’d take a look, but it’s not our number one priority at the moment.”

The loss of the store would be a blow to the destination shopping street, which has seen the closure of Debenhams recently, as well as BHS and its replacement Market Halls.

Asos has no experience operating a store model, however, so would likely bring in a partner to succeed in the bricks-and-mortar space. 

The etailer has also declined to take on Arcadia’s logistics network, including its Daventry warehouse.

Asos is, however, keen to work with retail partners on its newly acquired brands, including through expansion of the deal with American department store group Nordstrom, which Beighton says is important to growing the customer base in a “strategically important market”.

“Asos is a complementary new owner for Topshop, Topman, Miss Selfridge and HIIT and will be able to give the brands the revival they desperately need,” says GlobalData fashion analyst Chloe Collins.

“Though Asos plans to retain some of Arcadia’s design and buying teams, the brands have undoubtedly lost their fashion authority in recent years, so support from Asos, which is much more reactive to trends and relevant among younger consumers, should help steer them back in the right direction.

“Asos’ global reach will also help the brands target new international shoppers, and its plans to boost Topshop’s partnership with Nordstrom will hopefully reignite US shoppers’ love for the brand following the closure of its physical stores there in 2019,” adds Collins.

Shore Capital analyst Greg Lawless also sees it as ”a sensible acquisition from Asos that harnesses its already existing Topshop relationship and cements the brands for its core customer”.

While the future of the flagship Oxford Circus store is up in the air, Asos is confident it knows how to bring Topshop and its stablemates back on track as digital-first brands – elevating Asos’ fashion credentials against its competitors.