Fears for shop worker jobs as Asos closes in on Topshop rescue

Asos is in exclusive talks to buy Topshop out of administration with a deal likely to be signed within a week.

Rival bidders are waiting in the wings but the online fashion group has stolen a march in the frenzied bidding war for the jewel in the crown of Sir Philip Green’s collapsed Arcadia empire.

But there are fears for Arcadia’s 13,000-strong workforce as Asos does not want to take on the stores if it completes the deal.

Target Topshop: Online fashion group Asos has stolen a march in the frenzied bidding war for the jewel in the crown of Sir Philip Green’s collapsed Arcadia empire

The internet-only retailer is also seeking to buy Topman, Miss Selfridge and the HIIT gym clothing brand, with the price tag believed to be at the higher end of the £250million to £300million range. 

It is up against deep-pocketed rivals including Boohoo, Chinese fast-fashion giant Shein and US investment firm Authentic Brands, which is working with High Street retailer JD Sports.

The Issa brothers, who bought Asda last year, have also made a ‘very competitive’ offer in a bid to gatecrash the process at the last minute. 

Asos said the deal ‘would represent a compelling opportunity to acquire strong brands’ that ‘resonate well with its customer base’ but cautioned that a deal was not guaranteed.

Sources said administrators were keen on Asos because of its existing wholesale relationship with Topshop and because its cash offer would allow the transaction to be completed quickly.

An insider said: ‘Everyone’s very focused on trying to get it done this week, or early next week.’

Asos shares rose 5.6 per cent, or 268p, to 5,056p yesterday. The move is a diversion from its strategy of developing its own brands, and last month the business had played down rumours it would be a serious contender for Topshop. 

But it decided to join the fray believing the strength of its teams of designers and marketers, and the ongoing popularity of Topshop with fashion-conscious customers aged 18 to 34, made it a good fit.

In the last fortnight, tough competition has tested Asos’s mettle.

Shein and Authentic are on the hunt for a trophy asset to give them a foothold in the UK market, pushing up the price. 

Next was forced out of the race last week, with bosses saying they were not prepared to pay the premium. A sale to Asos would usher in a changing of the guard in British retail, following yesterday’s sale of Debenhams to Boohoo.

In 2006 when Green was knighted and given the nickname ‘king of the High Street’, Asos was turning over just £19million. 

Green is even said to have labelled Asos a ‘fad’. Asos is now a £5billion giant operating in 239 countries. Arcadia’s stable of brands and 440 stores is expected to fetch no more than £400million having suffered a decade-long decline.

But a cloud remains over Arcadia’s estimated £350million pensions black hole as the national ‘lifeboat’, the Pension Protection Fund, confirmed it is still analysing the deficit. 

Green’s wife Tina paid in the second instalment of a planned £100million in December, but the fall in the value of the Oxford Street store means it is likely savers will be forced to take a cut.

In 2017, Green was forced to put £363million into the pension scheme for BHS workers following calls for him to be stripped of the knighthood he received for services to the retail industry.

This post first appeared on Dailymail.co.uk