Online fashion retailer ASOS (LON:ASC) has thrown its hat in the ring for the purchase of brands owned by Arcadia. It does not want the high street shops, though.
ASOS is keen on the TopShop and associated TopMan brands. Miss Selfridge could also be included in the package. There are rival bidders and there is no certainty it will acquire the brands. AIM-quoted rival boohoo (LON: BOO) is also interested, along with other bidders. boohoo has a track record of buying other brands, whereas ASOS has always concentrated on its core brand.
There could be a decision by the end of this month or early next month. There are other brands up for sale, such as Wallis.
ASOS did better than expected in the four months to December 2020 with UK sales 36% higher. ASOS is back to being the largest company by market capitalisation on AIM.
Overall sales were 23% ahead with Europe, the US and rest of the world all growing at around 18%. France was a strong market because shops were closed. There was a change in mix of sales with more business in areas such as face and body and leisurewear. That led to a dip in gross margin. Active customers increased by 5%
Interim pre-tax profit should be at least one-third higher at £40m plus, while full year profit should be one-quarter ahead at £172m. This figure continues to benefit from lower return rates, which have been boosting the profit figure.
If TopShop is acquired by ASOS it is difficult to assess how much of the revenues that were generated online can be maintained and whether former high street shoppers will switch to online.