Asos has emerged as a serious contender in the bidding war for Topshop as a narrowing field of bidders vies for control of one of the high street’s best-known fashion brands.
The brand is part of Sir Philip Green’s fashion empire Arcadia which collapsed into administration last year. It is being auctioned off alongside the group’s other brands which include Dorothy Perkins, Burton and Miss Selfridge.
Arcadia, which employed 13,000 people across 500 outlets, has been the biggest high street casualty of the pandemic.
High street rival Next, which was working with the US hedge fund Davidson Kempner, pulled out of the auction on Thursday. In a statement, the consortium said it had been “unable to meet the price expectations of the vendor” amid speculation that Topshop, Arcadia’s prime asset, could fetch between £250m and £300m.
The remaining bidders in the Arcadia auction are thought to include Shein, a Chinese online fashion retailer and Authentic Brands, the US owner of the Barneys department store. Online group Boohoo is also thought to be still involved.
If Asos wins the day it would be bad news for Topshop shop staff as it is an online business which does not operate any stores. Asos chief executive Nick Beighton has played his cards close to his chest but analysts say Topshop would be a good fit; it already sells the brand on its website and serves a similar demographic.
Arcadia, which Green bought for £850m in 2002, is home to a stable of household names including Topshop, Topman, Dorothy Perkins, Wallis, Miss Selfridge and Burton. Evans, its plus-size clothing brand, has already been hived off and sold to City Chic Collective, an Australian retailer, for £23m.
Arcadia was struggling before coronavirus took a hammer to the high street with the most recent set of accounts available showing a loss of £177m on sales of £1.8bn in 2018. Although Topshop’s market share had fallen sharply in recent years analysts think still think it has annual sales of around £600m.
The pandemic was the final straw for Arcadia, which along non-essential retailers was forced to close its stores for long periods of time. By contrast business has boomed for online players with Asos’s UK sales up 36% in the last four months of 2020.