Boohoo buys Debenhams’ online platform for £55m

Boohoo has bought Debenhams’ online business for £55 million, the transaction does not include the retailer’s stores, stock, or financial services.

The department store’s online platform has around 300 million UK website visits per year, which according to Boohoo makes it a top 10 retail website in the UK by traffic.

According to Boohoo, in Debenhams’ most recent financial year to 31 August 2020, its online platform had revenues of around £400 million.

The online retailer said it plans to rebuild and relaunch the Debenhams digital platform, to help further its ambition to “lead the fashion e-commerce market and grow into new categories like beauty, sport, and homeware."

The Transaction will be funded via Boohoo’s existing cash balance, which stands at around at £387 million.

Boohoo will expand the range of products sold via the Debenhams marketplace by maintaining existing marketplace brand relationships and adding new brands over time.

The Group will continue to operate the current wholesale beauty model but will expand the range via Debenhams’ marketplace model.

Debenhams own fashion brands will be absorbed into Boohoo's current brand portfolio and sold via the core Debenhams site and their own pureplay websites.

"The acquisition of the Debenhams brand is an important development for the Group, as we seek to capture incremental growth opportunities arising from the accelerating shift to online retail,” said Boohoo chief executive John Lyttle. “We have developed a successful multi-brand direct-to-consumer platform that continues to disrupt the markets that we operate in.

“The acquisition represents an exciting strategic opportunity to transform our target addressable market through the creation of an online marketplace that leverages Debenhams' high brand awareness and traffic through the development of beauty and fashion partnerships connecting brands with consumers."

Mahmud Kamani, executive chairman, commented on the acquisition: "This is a transformational deal for the Group, which allows us to capture the fantastic opportunity as eCommerce continues to grow. Our ambition is to create the UK's largest marketplace. Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion eCommerce, but in new categories including beauty, sport and homeware."

Jake Hewlett, managing director, from global marketplace and ecommerce services platform Tambo, said: "Boohoo investing £55m to buy Debenhams’ website and create a marketplace is yet another major proof-point of the accelerating shift in retail towards E-Commerce.

He added: "The way people used to shop on the high street is now moving online - with marketplaces becoming the new department stores. Covid-19 has accelerated this move significantly - in the last six months we have grown our client base by 67% and doubled our team to deal with the demand from well-known brands recognising the importance of implementing a profitable, data-driven marketplace strategy.”

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