The struggling online fashion retailer Asos is in discussions to sell Topshop to the American company Authentic Brands Group, which also owns Ted Baker, Reebok, and Forever 21, among others. This potential acquisition is seen as an effort to unlock significant value for Topshop, which could possibly make a return to high streets after its dramatic collapse as part of Sir Philip Green’s Arcadia empire three years ago.
Authentic Brands Group, founded by Canadian billionaire Jamie Salter, is revisiting the acquisition of Topshop after an unsuccessful attempt in 2020. The deal, if realized, would position Salter’s group in direct competition with retail tycoon Mike Ashley, founder of the Frasers Group, who has invested in companies like Asos, Boohoo, and Hugo Boss.
For Asos, this development represents a challenge in integrating Topshop into its online-only business. Asos acquired Topshop for £330 million in February 2021 but did not purchase any of the brand’s 70 stores, resulting in the loss of numerous jobs. In its latest annual report, Asos valued Topshop’s assets, including Topman and Miss Selfridge, at £265 million.
Authentic Brands Group is supported by the private equity arm of BlackRock, the world’s largest asset manager, and has been on a buying spree in recent years. Apart from owning over 20 fashion outlets and the Barneys department store, it holds the rights to assets belonging to the estates of Elvis Presley, Marilyn Monroe, and Muhammad Ali.
If Authentic Brands successfully acquires Topshop, it could aid Asos in revitalizing its business, which has faced declining sales, leading to a more than 30% drop in its shares over the past year. The company’s current valuation is £461.6 million, down from over £5 billion when it acquired Topshop. This declining value has sparked speculation about potential privatization by investors like Mike Ashley and Anders Holch Povlsen.
Authentic Brands Group, known for its founder’s support of brick-and-mortar retail, has been acquiring bankrupt retailers such as Brooks Brothers and Forever 21. The potential acquisition of Topshop would align with the group’s transatlantic ambitions, following its £211 million acquisition of Ted Baker last year.
Asos recently issued a warning that its annual earnings are expected to fall short of previous guidance, and it has introduced new measures such as return charges for customers and restrictions on its buy-now-pay-later options.
Both Asos and Authentic Brands Group declined to comment on the situation.
