Boohoo has acquired Debenhams’ brand and website for £55m in what executive chair and co-founder Mahmud Kamani describes as “a transformational deal”.
None of Debenhams’ 116 remaining high street shops are included in the acquisition. As a result all of Debenhams’ stores will close permanently following a brief period after the current lockdown ends, at which points stores will reopen for a four to six week window to complete the stock clearance process. Up to 12,000 jobs are at risk as a result of the upcoming closures.
Boohoo said that the acquisition of Debenhams’ brand “represents a fantastic opportunity to grow the group’s target addressable market and increase the share of wallet opportunity through a new capital-light and low-risk operating model”.
Boohoo said the acquisition of Debenhams was rationalised by the chance to grow the etail group’s revenue, enter beauty, homeware and sports categories and monopolise on recognition for the Debenhams brand online.
The group highlighted that Debenhams’ current website is one of the top 10 UK retail websites by traffic, with more than 300 million visits per year.
Boohoo plans to rebuild and relaunch Debenhams’ online platform in the first quarter of its upcoming financial year to create the “UK’s largest marketplace across fashion, beauty, sport and homeware”, with new brands set to be added alongside the department store’s current online portfolio over time.
Boohoo will also sell Debenhams’ own-brand fashion lines via its existing etail websites, as well as on the relaunched marketplace.
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. 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.”
Kamani added: “This is a transformational deal for the group, which allows us to capture the fantastic opportunity as ecommerce continues to grow. Our ambition is to create the UK’s largest marketplace.
“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.”