Shares of Asos surge 20% following announcement of sale of Topshop and Topman labels
Asos Sells Majority Stake in Topshop and Topman to Heartland Group
In a significant move, Asos has agreed to sell a 75% stake in its Topshop and Topman brands to a new joint venture with Denmark's Heartland group. The sale, which took place in September 2024, was part of a wider refinancing effort following Asos's original £330 million acquisition of the brands. Heartland will own 75% of the new company, while Asos will retain certain rights for the brands [1][3].
The sale is expected to improve Asos’s liquidity by recouping part of its initial investment while retaining enough stake to benefit from the new venture’s growth. It also allows Asos to focus on its core ecommerce business, reducing direct operating responsibilities and risks related to Topshop and Topman [1].
The relaunch and revival of Topshop and Topman as fresh, standalone brands—with high street presence and partnerships like the one at Liberty department store in London—aim to strengthen Asos’s competitive positioning in fast fashion. This move could help Asos better compete against Shein, a fast-fashion rival, by leveraging well-known British brands with established customer bases and improving offline engagement, an area where Shein has less presence [2][3].
Meanwhile, the new joint venture is seen as a testament to the brands' potential. However, Associated British Foods, the parent company of Primark, has reported a drop in sales due to dreary early summer weather affecting retailer Primark. Primark's UK like-for-like sales dropped 0.6% during the third quarter and are set to slip by around 3.1 per cent in the three months to 14 September [4].
Shein, another fast-fashion competitor, is preparing for a stock market listing. Asos is facing sales pressure in Europe from Shein, but the sale of Topshop and Topman to Heartland is expected to help the company navigate this competitive landscape [5].
Asos's finance chief, Dave Murray, mentioned that decisions are being made to drive profitability rather than just sales numbers. The company will continue to sell the brands online, paying a royalty fee to Heartland for this privilege [2].
The partnership aims to bring Topshop and Topman to more customers globally. As José Antonio Ramos Calamonte, CEO of Asos, stated, this move is an important step in Asos's continued transformation [6]. Heartland, owned by Danish billionaire Anders Holch Povlsen, who also has a significant stake in Asos, will oversee the day-to-day operations of the brands [7].
Despite the challenges in the retail industry, the sale of Topshop and Topman to Heartland represents a strategic move for Asos, potentially enhancing its competitive stance against fast-fashion rivals and securing a portion of its initial investment.
[1] The Guardian - Asos sells majority stake in Topshop and Topman to Heartland for £135m [2] The Telegraph - Asos sells Topshop and Topman to Heartland for £135m, retaining 25% stake [3] BBC News - Asos sells Topshop and Topman to Heartland for £135m [4] The Independent - Primark sales drop as early summer weather hits high street [5] The Financial Times - Shein files for US IPO, aiming to raise $100bn [6] The Financial Times - Asos sells Topshop and Topman to Heartland for £135m [7] The Guardian - Asos sells Topshop and Topman to Heartland for £135m, retaining 25% stake
