Friday, September 20, 2024

Asos sells Topshop stake to Heartland amid refinancing

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The joint venture will grant Asos certain design and distribution rights for the Topshop and Topman brands in return for a royalty fee to allow it to continue selling the brands online.

Following the transaction, set to complete in Q4 2024, Heartland will own a 75% stake in the joint venture, worth £135m, while Asos will hold the remaining 25%.

Asos said the deal is expected to have a £10m to £20m negative impact on EBITDA for FY25 but will be “increasingly EBITDA accretive over time”.

Heartland is a holding company representing the interests of the Holch Povlsen family and their family business Bestseller, which holds a roughly 28% stake in Asos.

Alongside the Topshop announcement, Asos issued a trading update for FY24 and launched a £250 million bond refinancing. It expects adjusted EBITDA at the top end of consensus estimates, sales slightly below guidance and all other guidance as set at FY23 year end remains unchanged, subject to the impact of the Topshop deal.

José Antonio Ramos Calamonte, CEO of Asos, said: “Topshop and Topman have made good progress since we acquired the brands in 2021. The new JV [joint venture] with Heartland is testament to the brands’ potential and the partnership will help bring Topshop and Topman to more customers globally.”

Lise Kaae, CEO of Heartland said: “We are pleased to enter into this joint venture with Asos, bringing the best of the Topshop and Topman brands to customers globally, while supporting Asos’ strategy to obtain a more efficient capital allocation.”

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