Respect to Asos for turning down the considerably higher offer it received for the Topshop and Topman brands from competitor Shein with Authentic Brands Group in favour of the lower figure of £135m for a 75 per cent stake, which came from Heartland, owned by Anders Holch Povlsen who has backed Asos via Bestseller since its very early days. This preferred deal sets the stage for a joint venture where Asos will retain design and distribution rights for the two brands set against a royalty fee to Heartland on future sales. It also provides a much-needed cash injection for the wider Asos business, which appears to be well on the road to recovery following some very tough times.
Of course, much of Asos’ downturn can be attributed to Shein, which has taken a massive cut from the lower-cost end of the fast fashion market in the UK and across Europe. Placing the Topshop and Topman brands in Shein’s hands could only strengthen Shein’s position. As we all know, Shein is deep in the throes of ingratiating itself with the UK government and the City as it awaits the green light for an LSE float.
The rumour now doing the rounds is how likely it is that Frasers Group will further increase its stake in Boohoo and take over, and how quickly that might result in a quick and very profitable flip by Frasers Group over to Shein.
Watch this space…
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