Asos has launched a refinancing of the business as it enters into a joint venture with an investment firm owned by Bestseller owner the Holch Povlsen family, over its Topshop and Topman brands.
Bestseller CEO Anders Holch Povlsen is Asos’ largest shareholder.
The investment company, Heartland, will pay £135m for a 75% stake in the brands, with Asos holding the remaining 25%. The online retailer bought Topshop and Topman, alongside Miss Selfridge and HIIT, for £265m in 2021 after owner, Sir Philip Green’s Arcadia, plunged into administration.
The deal will grant the online retailer certain design and distribution rights for the Topshop and Topman brands in return for a royalty fee enabling it to continue selling the brands.
The proceeds of the sale will “significantly strengthen” the online retailer’s balance sheet.
Elsewhere, Asos has launched a refinancing which involves an offering of around £250m convertible bonds, which are due in 2028, and will repurchase some of its outstanding £500m convertible bonds, due in 2026.
It will also extend its existing facilities with investment firm Bantry Bay Capital to May 2027, with an option for a 12 month extension.
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The refinancing comes as the fashion retailer said it had made good progress on its ‘Back to Fashion’ strategy during its second half with full year profit set to hit the top end of estimates despite sales “slightly below” expectations.
The retailer has improved its speed to market through its new Test & React approach, which brings product from to design to site in less than three weeks. This enables it to better compete with fast fashion rivals.
Around 10% of the online giant’s own brand sales will be created this way by the end of its current financial year.
Asos CEO José Antonio Ramos Calamonte said: “We’re pleased to be making this announcement today which is an important step in Asos’ continued transformation.
“The joint venture and the launch of the refinancing will accelerate our strategy to both offer customers the best and most relevant product and to turn Asos into a company that delivers sustainable, profitable growth.”
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