In what has already been a terrible year for retail on most fronts excepting grocery, could there be some light at the end of the tunnel? Shortly after the news that UK high street stalwarts Debenhams and Arcadia had finally succumbed to both challenging trading conditions and the impact of COVID-19, rescue packages were announced.
First out of the gates was Boohoo, announcing that it was to acquire the Debenhams name – if not the physical stores. In a deal reported to be worth £55m, the online fashion store looks set to purchase the Debenhams brand to sell exclusively online, resulting in the closure of all stores and putting around 12,000 jobs on the line.
Competitor Asos is also looking to capitalise on a once mighty high street brand by revealing it is in exclusive talks with Arcadia Group’s administrators. These discussions, if fruitful, will see the high fashion online brand secure the iconic Topshop, Topman, Miss Selfridge and HIIT brands.
While Asos is arguably a close brand fit with youth-oriented, fast fashion brands like Topshop, analysts have been wondering how Boohoo, with a similarly young audience, might tally with the typical Debenhams customer. While Boohoo may benefit from the well-known retailer’s brand capital in beauty and homewares, the department store has been a staple of older customers looking to shop then dine in one of its on-site cafes, and is a regular stop on the school uniform circuit.
Boohoo’s move may be a savvy one. Following a Sunday Times investigation into working practices, the brand suffered in the press – if not at the hands of its customers – over allegations of slave labour. Allying with the Debenhams brand may be a chance to move the conversation on. Perhaps it is also a sign of relief in the market that these well-loved high street brands aren’t destined for complete obscurity that shares in both Asos and Boohoo climbed over five per cent following the announcements.
For a deeper examination of what went wrong at Arcadia, delve into our exclusive analysis from Russell Loarridge, Director, ReachFive.
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