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

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.