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The Boohoo Group’s purchase of Debenhams proves the speed of change in retail

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Following the news that the boohoo group has bought Debenhams out of administration, Emily Salter, Retail Analyst at GlobalData, a leading data and analytics company, offers her view on this news: “In a surprising turn of events that proves the speed of the significant changes that the retail sector is undergoing, the Boohoo Group has acquired the intellectual property assets of Debenhams, raising the question of the relevance of traditional department stores in a post-pandemic environment.

“The group will relaunch Debenhams’ website as an online marketplace, with its expertise at operating digital pureplays providing some hope that the retailer’s fortunes could be turned around, benefitting from the shift to online shopping.

“However, there is strong competition from other online marketplaces, not least from leading force Amazon, but also from the likes of Next and ASOS, so the boohoo group will have to develop a more compelling branded offer for Debenhams for it to succeed.

“The acquisition of Debenhams also provides the group with a chance to expand its empire into new categories such as beauty, sports and homewares, likely translating into the launch of branded products in these sectors on its existing websites such as boohoo.com and PrettyLittleThing, helping them stand out in the crowded fast fashion market.”

According to a report by Reuters, ASOS and Boohoo (established in 2000 and 2006 respectively) are Britain’s biggest e-commerce success stories, ideally placed to tap into a generation of consumers who increasingly shop on mobile phones and communicate via social media.

ASOS quadrupled profit in its 2019-20 financial year and Boohoo posted a 51% jump in first-half profit despite negative publicity over its supply chain. Their stock market capitalisations have grown to 4.8 billion pounds ($6.6 billion) and 4.2 billion pounds respectively.

Boohoo on Monday said it had acquired the 243-year-old Debenhams brand and other business assets, including all its in-house brands and websites, for 55 million pounds.

But the deal with Debenhams’ administrators, FRP Advisory, does not include any of the chain’s 124 stores or safeguard jobs.

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