UK's ASOS sells 75% stake in Topshop & Topman to Heartland for $177 mn

ASOS will retain a 25 per cent interest, with the option to sell an additional 5 per cent at a later date. The deal is expected to provide ASOS with a net cash inflow of approximately £118 million (~$154.96 million) after costs, the company said in a media release.

In a separate move, ASOS has unveiled a significant refinancing plan and a new joint venture as part of its strategic focus on sustainable growth. The company is offering £250 million (~$328.30 million) in Convertible Bonds due 2028 and simultaneously repurchasing part of its £500 million (~$656.60 million) Convertible Bonds due 2026. Additionally, ASOS has extended its facilities agreement with Bantry Bay Capital until 2027, with an option for a further 12-month extension.

ASOS plans to reinvest the proceeds to strengthen its balance sheet while retaining the rights to market and sell Topshop and Topman products online. The joint venture is expected to boost the brands' global reach through partnerships, both online and in physical stores.

In its FY24 trading update, ASOS confirmed it is on track to meet its adjusted EBITDA targets at the upper end of expectations, although sales are anticipated to come in slightly below earlier guidance. The company’s ‘Back to Fashion’ strategy has delivered key milestones, including improved product turnaround times and a reduction in returns through AI-driven initiatives. These improvements have allowed ASOS to continue offering free returns across key markets.

The joint venture is subject to regulatory approval, with completion expected in late 2024.

Fibre2Fashion News Desk (KD)