Asos has owned the retail brand since 2021 after acquiring it when its previous owner Acardia collapsed into administration. It did not purchase Topshop’s physical stores and instead shifted it to an online-only offering.
Independent investment group ShoreCap says that the developments “raise questions about Asos’ long-term viability”. However, it also added that the deal could allow Authentic Brands Group to “potentially revive Topshop on high streets”.
ShoreCap research analyst Eleonora Dani says: “While the sale might offer Asos a much-needed cash injection, it also presents a conundrum for the retailer’s long-term prospects, in our view. Topshop had been a key growth driver for Asos since its acquisition. Selling it now could severely impede the company’s recovery efforts, particularly when it has already faced challenges from new policies such as charging customers for returns and restricting buy-now-pay-later options.”
At the time of writing, Asos had not responded to Just Style’s request for a comment on the reports.
The reports come shortly after Asos delayed its full-year results by a week. Last year, Asos reported a pre-tax loss of £31.9m ($36m) after what its CEO José Antonio Ramos Calamonte called an “incredibly challenging economic environment”.
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At the time, GlobalData’s senior retail analyst Chloe Collins said that Asos’ September 2022 relaunch of the Topshop and Topman brands provided “some hope” for the retailer, although she added: “It’s likely that since the brands were purchased by Asos in January 2021, their shoppers have already switched to other players like Zara, particularly those over 30, for which Asos’ core offer does not have as much relevance.
“The new price structure of Topshop is also more elevated and premium, and it may be challenging to convince shoppers to pay these given the current macroeconomic climate, especially as many may have lost trust in the quality of the products since the acquisition.”
Authentic Brands, which also purchased Ted Baker last year for £211m ($253.5m), had not responded to Just Style’s request for comment at the time of going to press.