Dozens of Debenhams stores are set to close after the company’s intellectual property assets were sold by its administrators to the fashion retailer Boohoo in a deal worth £55 million plus VAT.
Boohoo has described the purchase as a “fantastic opportunity” to grow its addressable markets, with Debenhams’ online platforms attracting roughly 300 million website visits on an annual basis.
The company’s chief executive John Lyttle has said the goal for Boohoo is to leverage Debenhams’ high brand awareness and online traffic in ways that ultimately boost its overall performance as an online retailer.
“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,” he said in a statement.
However, Boohoo’s plans for the Debenhams’ brand looks certain to be bad news for the thousands of people previously employed by the business and its more than 100 UK high street stores.
Having been in existence as a high street retailer for more than 240 years, Debenhams is now in the process of closing after falling into administration several times since 2019 and entering liquidation late in 2020.
The company was issued with a winding up order by the Insolvency and Companies Court just a few hours after the deal with Boohoo was announced.
During the relevant court proceedings, Debenhams was described by the judge presiding as being a “rudderless ship drifting in an ocean of insolvency, unable to be rescued”.
“It is time for the court to bring this ship into port, so the harbour master, here the Official Receiver, can assess the position,” the judge said.
Meanwhile, Mahmud Kamani, executive chairman of Boohoo, has described the purchase of the Debenhams brand and its websites as being a “transformation deal” for his company and one that could have a big impact on its online performance.
“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,” he said.