Boohoo buys Karen Millen and Coast, putting 1,100 jobs at risk
Online fast-fashion retailer buys upmarket brands whose shops look set to close imminently once administrators sell them off
Boohoo has bought the online businesses of Karen Millen and Coast for £18.2m in a deal that puts more than 1,000 jobs at risk.
Administrators of Karen Millen and Coast said 62 jobs would go immediately and the two brands’ 32 UK stores and 177 concessions would continue to trade for a “short time” while assets are sold off. The two companies employ around 1,100 people between them.
Online-only retailer Boohoo, which specialises in fast fashion for a younger audience, bought Karen Millen and Coast out of administration through a process known as a pre-pack.
Boohoo already owns brands including PrettyLittleThing, Nasty Gal and MissPap. The acquisitions will add names to that portfolio that are popular with an older and more affluent customer base.
Karen Millen’s owner Kaupthing was put up for sale in June by its owner, Iceland’s Kaupthing bank. The fashion retailer lost £5.7m in 2018 and £11.9m the year before. Coast has also struggled financially.
Death of the British high street? The retailers affected
Show all 9Manchester-based Boohoo saw sales jump 39 per cent in its latest quarter to more than £250m. The company has been boosted by an effective social media marketing strategy and tie-ups with stars from hit reality TV show Love Island.
Retail analysts at Jefferies said the deal was a good one for Boohoo investors.
“Karen Millen and Coast are both strong UK brands, in our view, with distinctive premium ranges, including work wear and occasion wear, that would complement the existing group brands,” they said.
“We would expect Boohoo to keep the creative teams and brand marketing completely separate but seek to leverage its efficient sourcing, distribution and IT infrastructure to grow the business globally and make it more profitable.“
Rob Harding a partner at Deloitte and joint administrator of Karen Millen and Coast, said UK retailers face an “extremely challenging” environment.
“Karen Millen has been seeking to address the financial challenges that it faced by pursuing a sale of the business and, whilst a sale of the whole business has not been deliverable, the Boohoo transaction facilitates the survival of these iconic British brands through an online platform.”
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies