UK Fashion Retailers Gain on Collapse of Arcadia, Debenhams with Brands Up for Sale
By Matteo Castia
A potential 1.4 billion pounds ($1.87 billion) of revenue from
clothing retailer Arcadia and GBP1.8 billion from department-store
Debenhams is up for grabs as British peers gain on the collapse of
the two large competitors.
Arcadia said late Monday it had appointed administrators to the
business and various subsidiaries, while Debenhams entered into
administration back in April. In both cases, the coronavirus
pandemic has dealt the final blow to already struggling
Sport fashion company Frasers Group PLC attempted and failed to
take over Debenhams and said Monday it would be interested in
Arcadia assets, while sport-goods retailer JD Sports has terminated
talks about taking over Debenhams.
The race to secure brands from the collapsing chains on, with
online fashion retailer Boohoo in pole position thanks to its
recent capital raise to expand its portfolio, according to U.S.
Boohoo would be the most logical owner of Arcadia's Topshop and
Topman brands, while the remaining ones would better fit in with
Marks & Spencer Group PLC's customer base, the bank said.
"However, the lack of a compelling digital offer is clear and in
this regard the Next PLC's Total Platform makes sense if a third
party is prepared to invest in the Dorothy Perkins, Wallis or
Burton brands," according to Citi.
Arcadia employs around 13,000 people across 444 sites in the
U.K. and 22 overseas. Citi said Arcadia's fall into administration
caps off years of losing market share to competitors, with the main
beneficiaries in the U.K. being online fashion retailers Asos PLC
and Boohoo, Swedish clothing retailer H&M Hennes & Mauritz
AB, and Associated British Foods PLC's clothing arm Primark.
The potential closure of Debenhams is likely to be good news for
Primark, M&S and Next, Citi added.
Shares in JD Sports, Frasers Group, Next, H&M, Boohoo, Marks
& Spencer, Asos and AB Foods are rise, with Frasers Group
making the most progress, up 4.5% at 440.8 pence.
Write to Matteo Castia at firstname.lastname@example.org
(END) Dow Jones Newswires
December 01, 2020 05:56 ET (10:56 GMT)
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