(qlmbusinessnews.com via theguardian.com – – Tue, 6th Aug 2019) London, Uk – –
Cyber retailer offers to buy online businesses but fails to mention high street network
The online retailer Boohoo has made an offer to buy the digital businesses and brands of Karen Millen and Coast, in a move that will raise fears for the jobs of hundreds of workers in the brands’ high street stores.
In a statement to the stock market published on Tuesday, Boohoo said it had offered to buy the brands, but made no mention of the struggling Karen Millen’s extensive high street network.
Karen Millen and Coast together employ about 1,100 people with 32 stores and 177 concessions across the UK. Coast also has a significant overseas presence, with concessions in the Middle East and outposts as far-flung as Singapore and Malaysia.Quick guide
Why are UK high street retailers in trouble?
The Karen Millen holding company lost £5.7m in the year ending February 2018, after losing £11.9m in the previous financial year. Deloitte was hired as advisers about six weeks ago to assess options, and quickly decided a sale was the best option.
It is understood that Karen Millen has received multiple bids, but Boohoo’s offer is preferred at this point. Administrators could be called in as soon as Tuesday to run the sale.
In its statement, Boohoo said it had “made an offer to acquire the online business of renowned British brands Karen Millen and Coast, together with all associated intellectual property rights”.
A large proportion of Coast’s concessions are located in Debenhams and House of Fraser department stores, which have been forced to close branches to weather the high street trading crisis.
Boohoo, the fast-growing online empire whose brands include PrettyLittleThing, Nasty Gal and MissPap, has been one of the few retailers to buck the trend of painful decline in the sector. In June, the company reported a 39% sales rise in the three months to 31 May.
Boohoo was founded by the fashion entrepreneur Mahmud Kamani and Carol Kane in Manchester in 2006. It has expanded quickly, floating on the stock market in 2014. Its market value was £2.7bn on Monday, and shares rose by 1.2% in early trading on Tuesday.
The retail analyst Nick Bubb applauded the company’s move to diversify its business towards the older shoppers who frequent Karen Millen and Coast.