In a strategic business move, Asos has sold a majority stake of 75% in Topshop and Topman for £135m.
- Heartland, representing the Holch Povlsen family, is the new partner in a joint venture with Asos, enhancing global reach of the brands.
- Asos will retain certain design and distribution rights, maintaining an online presence for Topshop and Topman.
- The transaction might have a negative impact on Asos’s EBITDA for FY25, but is anticipated to be beneficial over time.
- Heartland’s involvement aligns with Asos’s strategic goals for efficient capital allocation and growth in global markets.
In a strategic development aimed at refining its business operations, Asos has announced the sale of a 75% stake in Topshop and Topman to Heartland for a reported £135 million. Heartland acts on behalf of the Holch Povlsen family, known for their business Bestseller, which already holds a significant stake in Asos.
Following this major transaction, a joint venture will be established, granting Asos the ability to retain design and distribution rights for Topshop and Topman brands. In exchange, Asos will earn a royalty, ensuring the continuation of online sales for these popular fashion brands.
The deal, expected to conclude in the last quarter of 2024, signifies Heartland’s 75% ownership in the joint venture while leaving Asos with a 25% stake. Even though Asos anticipates an EBITDA impact ranging from £10 million to £20 million for the fiscal year 2025, they remain optimistic about long-term accretive benefits.
Alongside the sale, Asos also shared its trading update for the fiscal year 2024, indicating that the company’s EBITDA is projected to meet the upper end of consensus estimates. However, sales are expected to be slightly below previous guidance, although other projections remain consistent with those announced at the end of fiscal year 2023.
José Antonio Ramos Calamonte, CEO of Asos, highlighted the progress of Topshop and Topman since their acquisition in 2021. He noted the joint venture with Heartland as a testament to the brands’ potential, underscoring the opportunity to reach more customers globally through this collaboration.
Lise Kaae, CEO of Heartland, expressed satisfaction with the new partnership, emphasising its role in bolstering Asos’s strategy for more efficient capital allocation, and bringing Topshop and Topman to a wider global customer base.
The partnership between Asos and Heartland marks a pivotal step in the global expansion and strategic growth of the Topshop and Topman brands.
