(Bloomberg) -- Asos Plc, the troubled UK online fashion seller, agreed to sell control of its Topshop and Topman brands to a company controlled by Denmark’s Holch Povlsen family, the owner of retailing group Bestseller A/S.
Asos is forming a joint venture with the family’s Heartland A/S, which will pay £135 million ($178 million) for a 75% stake in the two brands the UK company acquired in 2021 from Philip Green’s insolvent retail business as part of a £295 million deal.
Shares of Asos rose as much as 16% on Thursday morning in London, after having fallen 17% over the past 12 months.
Topshop was once one of Britain’s best-known apparel brands and for many years was a regular feature in the country’s shopping malls. When Asos took control it closed the stores but kept the brands alive as online labels.
Asos said it intends to relaunch Topshop.com within six months of the completion of the deal. It will continue to offer the brands on its e-commerce sites too.
Bestseller operates wholesale and retail businesses with more than 20 brands including Jack & Jones and Vero Moda. The company has about 2,700 branded Bestseller stores across 32 countries, operating 2,100 of them directly with the rest run by partners.
Asos, which has been cutting costs and reducing stockpiles of unsold clothes, said it expects sales slightly below guidance for the full year, though adjusted earnings before interest, taxes, depreciation and amortization will be at the top end of consensus estimates.
The company announced it will refinance a bond due April 2026 with new debt maturing in 2028 and repay the rest in cash. It will also extend the maturity of an existing facility with Bantry Bay Capital. The 2026 convertible notes gained about 12 pence on the pound to 84 pence, according to data compiled by Bloomberg.
“Pushing out its debt and the cash inflow is expected to be taken positively, but there is still much to do to stabilize the business,” said analysts Ben Hunt and Kate Calvert at Investec.
--With assistance from Luca Casiraghi.
(Updates with bond trading in penultimate paragraph)
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