A website too far for the famous name
Boohoo plans to use the name as an online only venture and means that Debenham’s remaining stores will disappear with the likely loss of up to 12,000 positions.
After the sale had concluded, a judge made a winding-up order on the company in an online hearing in the Insolvencies and Company Court yesterday.
Judge Daniel Schafer said he was making a winding-up order of his own motion describing Debenhams as “plainly insolvent” noting that the company was not trading and had no directors in office. He said: “The company is a rudderless ship drifting in an ocean of insolvency, unable to be rescued.
“It is time for the court to bring this ship into port, so the harbour master, here the Official Receiver, can assess the position.”
Debenhams administrators had already announced last week that six of their prime retail sites including their flagship store on Oxford Street wouldn’t be reopening.
As well as the Debenhams name, Boohoo have acquired their in-store brands of Maine, Mantaray, Principles and Faith.
They said: The group will only be acquiring the brands and associated intellectual property rights. The transactions do not include Debenhams’ retail stores, stock or any financial services.”
The website received over 300 million visitors a year making it one of the top 10 UK retail websites by traffic.
Boohoo have already bought several other brands out of administration in the past 12 months including Oasis, Coast and Karen Millen but not any of their high street stores.
While Sport Direct owner Mike Ashley has been rebuffed in his attempts to gain control of Debenhams on several occasions and was looking to have the business wound up before Judge Schafer’s intervention, he might be in pole position to strike deals with landlords for some of Debenhams prime locations for other brands in the Sports Direct group including Flannels and House of Fraser.
At time of writing, ASOS have also just announced that they have purchased the Topshop, Topman and Miss Selfridge brands from the Arcadia group for a reported £295 million.
The earliest indications are that only 300 of the 13,000 Arcadia staff will come across with the brands which will, like Debenhams, be migrating to an online only presence which means that none of the 500 physical stores will reopen.
ASOS Chief Executive Nick Beighton said: “The acquisition of these iconic British brands is a hugely exciting moment for Asos and our customers and will help accelerate our multi brand platform strategy.
“We have been central to driving their recent growth online and, under our ownership, we will develop them further, using our design, marketing, technology and logistics expertise, and working closely with key strategic retail partners in the UK and around the world.”
Goodbye Debenhams
Chris Horner, Insolvency Director of BusinessRescueExpert, said: “The Debenhams story proves that no business has a divine right to exist, let alone succeed in a retail environment that is evolving right in front of our eyes.
“There’s no guarantee that what worked last year will work next week or month.
“Retail shoppers may come back to 100% of the levels they were at before lockdown – it might be 50% or after a year of welcoming daily deliveries to their door, maybe consumers will decide that they prefer being waited on and their browsing will be exclusively online instead.
“It’s rare for a judge to take the initiative and bring a winding-up on their own motion rather than adjudicate on a creditors winding-up petition, but in this case it’s probably the right call as it brings the saga to a final close rather than let things linger on.
”The Asos acquisition of Topshop, Topman and Miss Selfridge follows the same playbook and the only thing we can say with any certainty about the UK retail environment in 2021 is that this won’t be the last of these high street to website acquisitions.”
If nobody is sure what business as usual means anymore, then what can a business that’s unable to trade as they did do in the meantime?
The proactive ones will be looking for every advantage and benefit they can get while everybody is in the same position.
This includes getting a professional opinion on their plans and situation to see if there’s anything that can be done better or if there’s any tricks that are being missed.
They can advise you on strategies to protect your business and make sure that it’s fine tuned when it’s ready to open the doors again – virtually or physically.