Just keeps on booming every time a physical shop goes bust.
Crikey. £300 million
It is paying £265m for the brands and a further £30m for the stock.
The administrators added that the deal was expected to complete on 4 February.
…about 300 people currently employed by the brands in design, buying and retail partnerships would transfer to Asos.
However, neither Asos nor the administrators made any mention of the thousands of people who worked in the brands’ store networks, nor what will happen to their jobs.
Some more information from ASOS’ RNS
FY20 online and retail partner revenue of c.£265m; split c.60:40 brand online / retail partners and c.50:50 UK / international
Fully funded from cash reserves; cash position remains robust
Still think ASOS have a lot of room to go up, a lot of the brick and mortar stores have been so poor online, and Amazon hasn’t cornered the market (for once).
Wondering what all this means for high streets though.
ASOS webcast on arcadia group acquisition (starts at 30 minute mark roughly)
topshop/topman/missselfridge websites now just point to ASOS i.e. you have to use ASOS. Is this a mistake? Boohoo kept the prettylittlething/nastygal/misspap websites independent. It could be ASOS’s move is temporary until they integrate their systems, im not sure.
Part of me thinks asos’ decision to acquire these brands was reactionary based on what boohoo did and they don’t know what they’re going to do with them.
Hmm I disagree as the ASOS model is more of a marketplace. They have been stocking Topshop products for quite a while now so it probably makes it easier for them to just integrate these brands onto their site. They just need to do a good job to keep the brand’s value strong in the minds of the loyalists
This could be a poor move on their part. One big advantage of buying a competitor is that you immediately increase your coverage in search engines - ie the more clothing websites you own that rank on the first page of google for, say, “mens trousers” then the more customers you are going to bring in from search.
So one valid strategy is to buy competitors and keep them ‘open’. This also means you can diversify your audience - ie have a different brand ranking for “mens trousers” for each age group, so no matter who is searching, they will click on one of your properties.
I think this is the strategy Boohoo took, they specifically alluded to diversifying audience as part of the reason for acquiring Debenhams - it’s an entirely different audience for them so it makes sense to keep the brand alive and separate.
There is likely technical challenges to keeping multiple brands up and running though. Not only do you have to manage multiple websites, potentially running on different underlying code, but you also have to keep the product lines, distribution, customer services etc. up and running as well. That may not have been possible or desirable for Asos to do and it is perhaps better for them to integrate the clothing lines they intend to keep alive into their own website (where they were already selling topshop etc. clothes anyway).
If they don’t intend to keep the arcadia group websites up and running, I would at least expect them to eventually redirect them to Asos. Currently they’ve replaced every page on the Topshop site with the same image which takes you to the Asos homepage when you click on it. If they keep this set up for too long they will eventually loose all the historic ranking positions that the Topshop (and other) domain held for individual search terms. Ultimately I would hope to see them redirect like for like pages to their own website (eg redirect the “mens trousers” category page on Topshop to the same category page on Asos). This way they will effectively consolidate any ranking potential from Topshop’s pages to equivalent pages on Asos.
According to SearchMetrics, Topshop has a traffic index 48% larger than Asos and the two domains only share about 22% of their collective keyword coverage, so it would be a bad move to both loose that larger traffic index and additional keyword coverage through neglecting to properly migrate or relaunch the domains they are now in possession of.
That was quite insightful. Maybe it isn’t the smartest decision to remove the websites
Great analysis. I was thinking along the same lines and in contrast with Boohoo’s strategy it looks really poor. They’ve paid circa 300 million just to own brands they already sold on their website; not expanding their audience, not leveraging the brand’s goodwill (website/socials). I now wonder what they’ll do with the brand’s social medias they’ve acquired.
topshop.com now actually 301 redirects to
www.asos.com/topshop . What a pointless non value add and non-synergistic acquisition.
And our latest deep dive into ASOS.
After a bumpy road these last few years, could the Topshop acquisition and pandemic be a new dawn?
I bought ASOS at £11 in march so I’m holding on but its been in the 45-55 range for months now, very solid base. I think the market has changed but fashion is one area where people don’t want to buy clothes from amazon/supermarkets so ASOS and boohoo have capitalised, particularly with no Primark online. More bricks and mortar will struggle and they can benefit if they don’t blow it.