Internet-based fashion group Boohoo has bought the online businesses of fashion chains Karen Millen and Coast, leaving a question mark over the fate of the two retailers’ stores and concessions in Britain.
Boohoo said it paid £18.2m (€19.8m) in cash for the brands, in line with the details of a bid announced earlier yesterday.
“We can expect more deals of this nature as it (e-commerce) increasingly becomes the key battleground for retail and consumer businesses seeking to build market share and dominate their particular sectors,” said Jonathan Buxton, head of retail and consumer at Cavendish Corporate Finance.
Sky News had reported details of the deal and said the sale would put hundreds of jobs at risk at the two brands’ stores. Karen Millen and Coast have a presence in nearly 60 countries, including in Ireland, through around 500 stores, franchises and concessions, as well as their online businesses
Karen Millen bought some parts of Coast’s business after the latter went into administration last year, before putting itself up for sale a few weeks ago as retailers in the UK crumble under pressure from online businesses and uncertainty around Brexit. In contrast, the bid is the latest sign of Boohoo’s increasing strength, with its online-only model growing rapidly.
Karen Millen, founded in 1981, is currently owned by Icelandic bank Kaupthing. The retailer had appointed Deloitte to look at various options for the business.
Boohoo’s shares rose by over 4%. Based in Manchester, Boohoo has been an online success story, drawing in a generation of younger consumers. Its cheap clothing is in stark contrast to Karen Millen and Coast which are known for party, office and wedding wear. Boohoo racked up more than £250m in sales in its most recent quarter to the end of May.