ASOS Prioritizes Long-Term Vision with Topshop Sale Despite Higher Bids business, fashion, fashion news

Last week’s announcement that ASOS had sold a 75% stake in Topshop and Topman for £135 million raised eyebrows, particularly as it represented a loss on the initial acquisition. While reports focused on the financial implications of this deal, they omitted a crucial detail: ASOS had rejected a significantly higher bid from Shein and Authentic Brands Group (ABG) in favor of a joint venture with Heartland, a company associated with ASOS shareholder Anders Hoch Povlsen.

This decision highlights ASOS’s strategic focus on long-term brand building and control over its intellectual property. The deal values the Topshop and Topman brands at £180 million in total. While this falls short of the £265 million ASOS paid for the brands, along with Miss Selfridge and HIIT, in 2021, it allows ASOS to retain a stake in the businesses and exert influence over their future direction.

Reports suggest that the Shein-ABG consortium offered £215.5 million, a figure closer to the initial acquisition price. However, ASOS ultimately chose the Heartland partnership, which grants them «certain design and distribution rights» for Topshop and Topman in exchange for royalty fees. This arrangement allows ASOS to continue selling these brands online while retaining control over their creative direction.

The deal also includes plans for a relaunch of the Topshop and Topman labels, with the potential for future expansion into physical stores. While there are currently no concrete plans for brick-and-mortar locations, ASOS shareholder optimism regarding this aspect of the deal suggests a belief in its long-term viability.

Some analysts believe that concerns over ABG’s recent struggles with the Ted Baker brand played a role in ASOS” decision to prioritize the Heartland partnership. This move underscores ASOS” commitment to ensuring the stability and success of the Topshop and Topman brands, even if it means accepting a lower immediate return.

By retaining control and involvement in the future development of these iconic brands, ASOS demonstrates its strategic vision for long-term growth and brand building within the ever-evolving fashion landscape.