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UK's ASOS to Sell Topshop to New Joint Venture with Heartland

FILE PHOTO: New employees wait in the lobby on their first day of work at the ASOS headquarters in London April 1, 2014. REUTERS/Suzanne Plunkett/File Photo
FILE PHOTO: New employees wait in the lobby on their first day of work at the ASOS headquarters in London April 1, 2014. REUTERS/Suzanne Plunkett/File Photo
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UK's ASOS to Sell Topshop to New Joint Venture with Heartland

FILE PHOTO: New employees wait in the lobby on their first day of work at the ASOS headquarters in London April 1, 2014. REUTERS/Suzanne Plunkett/File Photo
FILE PHOTO: New employees wait in the lobby on their first day of work at the ASOS headquarters in London April 1, 2014. REUTERS/Suzanne Plunkett/File Photo

ASOS has agreed to sell its Topshop brand to a new joint venture to be formed with the holding company of Danish fashion store billionaire Anders Holch Povlsen, the British online retailer said on Thursday.
Shares in the company rose 10% in early trading.
Analysts see the sale as a positive for ASOS, which has been struggling with losses and faced intense competition in Europe from the likes of fast-fashion firm Shein.
The group also said it expects its annual sales to be slightly below its previous forecast, but guided adjusted core profit at the top end of market expectations.
ASOS said it expects to get about 118 million pounds ($155 million) in net proceeds from the sale of Topshop and Topman brands to a new joint venture formed with Povlsen's Heartland, which would own 75% of the new entity.
It would use the money to bolster its balance sheet.
A unit of ASOS will hold the remaining 25% of the joint venture.
Heartland, through its unit Bestseller which owns fashion retail brands Jack & Jones and Vero Moda, is the top shareholder in ASOS.
ASOS bought the Topshop brand in 2021 from the administrators of Philip Green's collapsed Arcadia group, along with its Topman, Miss Selfridge and HIIT brands for 265 million pounds.
Topshop set up a joint venture with upscale US department store operator Nordstrom in 2012 to grow in the United States. Nordstrom, which held a minority interest in Topshop, will continue to hold a minority stake as part of the new JV.

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Fashion

Adidas Holds Back on Profit Upgrade Due to Tariff Uncertainty 

The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
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Adidas Holds Back on Profit Upgrade Due to Tariff Uncertainty 

The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)

German sportswear maker Adidas on Tuesday said higher US import tariffs and broader uncertainty around trade were clouding its forecasts and making it difficult to plan.

CEO Bjorn Gulden said the company would have hiked its revenue and profit guidance for 2025 after strong first-quarter results, but tariff uncertainty meant it decided to hold back.

Adidas expects the blanket increase in US tariffs to eventually cause price increases across all its products, but said it was currently impossible to quantify those or to establish the likely impact on US consumer demand, highlighting the paralysis caused by trade uncertainty.

Adidas has already reduced exports of China-made goods to the US to a minimum but is still "somewhat exposed" to much higher US tariffs on Chinese goods, Gulden said, though it is unclear how long those might remain at the current level.

"Given the uncertainty around the negotiations between the US and the different exporting countries, we do not know what the final tariffs will be. Therefore, we cannot make any 'final' decisions on what to do," Gulden said.

Unexpectedly high US tariffs on Southeast Asian countries such as Vietnam and Indonesia, announced at the start of this month, but paused until July, blindsided sportswear brands, which make most of their sneakers and clothing there.

As tariffs raise the cost of doing business, Adidas said it would strive to ensure US retail partners and consumers get product "at the best possible price", adding it would try to compensate for uncertainty in the US by boosting its performance in the rest of the world.

First-quarter sales rose 14% in Europe and 13% in Greater China and were up 26% in Latin America. Sales in North America increased just 3%, which Adidas said was due to the phase-out of its Yeezy sneaker line.

While sticking to its full-year guidance, Adidas said uncertainties "could put negative pressure on this later in the year".