The online fashion retailer Boohoo has bought Dorothy Perkins, Wallis and Burton for £25m, completing the breakup of Sir Philip Green’s Arcadia Group.
The deal to buy the three remaining fashion brands out of administration does not include any of their 214 UK stores, which will permanently close and put about 2,450 jobs at risk. Nor does it include the group’s Outfit chain, which sold products from all Arcadia brands from its 65 stores. These stores will permanently close, with the loss of hundreds more jobs.
Boohoo said on Monday that it had agreed to buy “the e-commerce and digital assets and associated intellectual property rights, including customer data, related business information and inventory of the Burton, Dorothy Perkins and Wallis brands”. Only 260 head office roles – involved in design, buying, merchandising and digital operations – will be transferred to Boohoo under the deal.
The shop workers union Usdaw said the sale of Arcadia’s remaining brands to an online specialist was “another devastating blow for our high streets”. It called for a joined-up plan, involving unions, employers and government, to help the struggling retail sector, and backed calls for increased taxes on online retailers.
Dave Gill, Usdaw’s national officer, said: “Retail is crucial to our town and city centres; it employs around three million people across the UK. The government must take this seriously; we need a recovery plan to get the industry back on its feet.”
The Manchester-based company said the takeover would be completed by Tuesday and that all three brands would be fully integrated by May this year.
The deal comes only weeks after Boohoo bought the Debenhams brand in a £55m deal that also excluded its high street sites, leading to the likely loss of up to 12,000 jobs.
Boohoo revealed in January it was in exclusive talks to buy Dorothy Perkins, Wallis and Burton, as administrators at Deloitte sought buyers for the remaining brands in the Arcadia empire, which went into administration last year.
The online retailer Asos bought the Arcadia brands Topshop, Topman and Miss Selfridge last week for £330m. The brands-only deal did not include any of the stores or warehouses. At least 2,500 high street shop workers are at risk of losing their jobs as a result of that deal. Arcadia’s plus-size clothing brand, Evans, was sold to the Australian retailer City Chic Collective for £23m in December.
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So far, administrators have raised more than £500m from selling Arcadia’s assets, which will be distributed to the company’s creditors. A report by the administrators, seen by the Guardian, suggested Green’s family was likely to receive £50m from the sale of Topshop, relating to an interest-free loan it made to the group in 2019 at the time of an emergency restructure which is secured against the group’s Daventry warehouse. However, more than 1,000 suppliers and landlords to the high street fashion chain are expected to get less than 1% of the money owed to them.
Boohoo shares closed down almost 5% at 347p.
Boohoo also confirmed on Monday that it was ordering its Leicester-based suppliers to stop using outside labour and subcontractors and bring all clothes-making in house by 5 March.