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Boohoo shares jump nearly 4% after Debenhams deal announced
Investors are jumpin gon Boohoo shares following the Debenhams announcement, pushing its stock price up 3.7%tot 348.7p per share.
Asos is also on the rise, up 0.88% at 4,891p per share, after revealing its own talks with Arcadia Group administrators.
European markets are broadly higher at the start of trading.
The FTSE 100 is up 0.2%, while the more domestically focused FTSE 250 is up more than 0.5%.
The French CAC 40 is up 0.4%, while Spain’s IBEX has jumped 0.6% and Italy’s FTSE MIB opened higher by 0.6%.
Germany’s DAX is up 0.5%.
The pan-European Stoxx 600 is also up 0.5%.
Boohoo is set to hold an investor and analyst call around 8:30am, so we’ll bring you updates as we get them. Stay tuned.
Boohoo’s executive chairman Mahmud Kamani is hoping the Debenham’s deal will give his group an edge in new areas including beauty, sport and homeware:
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.
Meanwhile, Boohoo’s CEO John Lyttle said the group was taking advantage of the huge shift to online shopping:
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.
Introduction: Boohoo to buy Debenhams in £55m deal
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
We start this chilly Monday morning with news that online retailers Boohoo and Asos are swooping in on two of Britain’s major high street brands.
First up, Boohoo confirmed that it is snapping up the Debenhams brand in a £55m deal that excludes the retailer’s remaining stores, meaning they will be wound down once they are in a position to re-open.
The deal – which will see Boohoo relaunch Debenhams’ online site in 2022 – will inevitably lead to job losses at the high street stalwart, which went into administration in December 2019 with 143 stores and 12,000 staff.
Meanwhile, Asos put rumours to rest and said it was in exclusive talks with administrators of Arcadia Group to buy up the Topshop, Topman, Miss Selfridge and HIIT brands.
The board believes this would represent a compelling opportunity to acquire strong brands that resonate well with its customer base.
However, at this stage, there can be no certainty of a transaction and ASOS will keep shareholders updated as appropriate. Any acquisition would be funded from cash reserves.
We’re likely to see a jump in Boohoo and Asos shares when trading starts 8am GMT, with European markets expected to open broadly higher this morning:
Not much on the economic calendar today, but we’ll keep you posted on how business confidence is faring in Germany when Ifo data comes out at 9am.
Today also marks the start of the annual meeting of the World Economic Forum, which is taking place virtually due to Covid, rather than in the Swiss mountain village of Davos (much to the disappointment of its mayor, Philipp Wilhelm).
- 9.00am GMT: German Ifo business climate index for January
Source: The Guardian
Keyword: Boohoo snaps up Debenhams for £55m; Asos in exclusive talks to buy Topshop – business live | Business