Boohoo bosses have hailed its ‘transformational’ £55million deal to buy Debenhams as a stepping stone to it becoming a leader in retail.
The deal ended Debenhams’s 243-year history on the High Street as administrators confirmed all 124 stores will close putting 12,000 jobs at risk.
But the purchase of the Debenhams brand and website marks a significant milestone for Boohoo as its online empire expands.
Boohoo founder Mahmud Kamani (pictured with co-founder Carol Kane) said the £55million deal to buy Debenhams move would help Boohoo accelerate its ambitions
The fashion retailer’s billionaire co-founder Mahmud Kamani said the move would help Boohoo accelerate its ambitions ‘to be a leader, not just in fashion ecommerce, but in new categories including beauty, sport and homeware’.
It is the fifth time in the last year Boohoo has snapped up a failed brand on the cheap, following acquisitions of Warehouse, Oasis, Coast and Karen Millen.
Yesterday Boohoo sketched out its plan to relaunch the Debenhams’s website as a marketplace for a host of third-party brands.
In the year to August 2020 Debenhams’s online business generated £400million in revenue and earnings of £12.7million.
Boohoo said the deal would be paid from its cash balance, which stood at £386.9million at the end of 2020.
Debenhams collapsed years after an asset-stripping consortium left it with massive debts which it subsequently failed to pay off.
But the City reacted positively, pushing Boohoo’s shares up 4.7 per cent, or 15.6p, to 348.5p, valuing the business at £4.4billion.
Analysts at Jefferies said it gives Boohoo ‘substantial scale and alow-risk route into building an online marketplace’.
Peel Hunt said it was a ‘compelling transaction’.
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