The sale of Topshop and Topman by Asos has reached completion, marking a significant transition for the brands.
- Heartland, representing the Holch Povlsen family, now holds a 75% stake in the joint venture valued at £135m.
- Asos retains a 25% interest, gaining certain design and distribution rights for an ongoing royalty fee.
- The deal might initially affect Asos’ EBITDA negatively, but it is expected to become EBITDA accretive over time.
- Industry analysts perceive the sale as a strategic move to boost Asos’ balance sheet quality.
The transfer of Topshop and Topman brands from Asos to a joint venture led by Heartland is now finalised, signalling a transformative phase for the iconic British fashion labels. Heartland, acting on behalf of the Holch Povlsen family and their family enterprise Bestseller, has secured a dominant 75% share in the venture, appraised at about £135 million.
Asos, while relinquishing majority control, maintains a 25% share and will continue to engage with Topshop and Topman through specific design and distribution rights. These rights allow Asos to perpetuate online sales of the brands while receiving a royalty fee in return. Such an arrangement ensures that Asos remains intertwined with the brands’ future retail strategy, albeit in a reduced capacity.
The financial outcome of this sale is anticipated to impact Asos’ EBITDA negatively by £10 million to £20 million for the fiscal year 2025. However, over time, the transaction is projected to enhance EBITDA, reflecting its potential long-term financial benefits for the e-commerce giant.
The deal was initially brought to light in September when Asos disclosed its plans, framing the move as a method to advance its financial stability. Industry experts concur, suggesting that this decision could be a strategic manoeuvre aimed at strengthening the company’s balance sheet.
The Asos-Heartland deal represents a pivotal restructuring aimed at long-term growth and stability.
