Asos offloads Topshop and Topman ownership amid refinancing 

Asos has offloaded ownership of the Topshop and Topman brands amid a refinancing of the business, after forming a joint venture with investment company Heartland. Following the move, Heartland will acquire a 75% stake in the brands for a total of £135m, and the remaining 25% stake will be owned by Asos. Topshop.com is also set to re-launch after the deal is complete. 

Heartland is owned by Bestseller, a family business which operates an “extensive” wholesale and retail business with more than £4bn sales across its channels, including 2,800 retail stores in over 30 countries.

Asos said the deal will allow it certain design and distribution rights for the brands in return for a royalty fee to enable it to continue marketing and selling the brands online. 

The board praised the move, saying it allows customers continued access to Topshop and Topman whilst aligning with its “renewed focus on allocating capital more efficiently” as part of its turnaround strategy.

The move is expected to have a £10m to £20m negative impact on EBITDA for FY25 yet will be “increasingly EBITDA accretive over time”, according to the company.

The news comes as Asos also issued a trading update for FY24, with the group expecting full-year adjusted EBITDA to be at the top end of estimates. Sales are expected to be slightly below guidance, however. 

Nonetheless, the company said it has made good progress on its ‘Back to Fashion’ strategy, which aims to make the business “more agile and more profitable”. 

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.

“Topshop and Topman have made good progress since we acquired the brands in 2021. The new JV with Heartland is testament to the brands’ potential and the partnership will help bring Topshop and Topman to more customers globally. Asos will continue to focus on what we do best – designing the best fashion and providing a destination for style.” 

He added: “Through the joint venture, new opportunities, both online and offline, can be explored and we are excited to continue to be part of the brands’ future while also realising the best value structure for Asos shareholders today.”

Lise Kaae, CEO of Heartland, said: “At Heartland, 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. We are committed to and look forward to working closely with our partners in a strong alliance.”