Topshop’s New Chapter: ASOS Partners with Heartland in Strategic £180m Joint Venture

Major Transformation for Iconic British Fashion Brand

In a significant development for the fashion retail sector, ASOS has announced the sale of a 75% stake in Topshop and Topman to Heartland for £135m, while retaining a 25% stake in the iconic British fashion brands.

Strategic Partnership and Financial Details

The binding agreement creates a new joint venture (JV) between ASOS and Heartland’s subsidiary, valuing the Topshop and Topman brands at £180m. The deal is expected to be completed in the fourth quarter of 2024, pending antitrust approvals.

Heartland, an investment and holding company representing the interests of the Holch Povlsen family and their business Bestseller, already holds a 28% indirect shareholding in ASOS.

Future Plans and Digital Transformation

A key element of the deal includes the relaunch of Topshop.com, as the brand’s website currently redirects to ASOS. This move aims to give Topshop a dedicated platform to express its identity and reconnect with customers who may have forgotten the brand.

The joint venture is also considering the possibility of opening physical stores, though no specific agreements are in place. Additionally, the partnership aims to make Topshop more agile with a faster supply chain, addressing a previous limitation and enabling the brand to react swiftly to trends.

Financial Impact and Future Outlook

While the deal is expected to impact ASOS’s earnings negatively by £10m to £20m in fiscal year 2025, it is anticipated to become increasingly profitable over time. The company views this strategic move as part of its broader transformation to deliver sustainable, profitable growth.

In the previous fiscal year, Topshop and Topman generated approximately £200m in adjusted revenue, representing about 5% of ASOS’s total revenue, with 40% of sales coming from the UK, 25% from the EU, 27% from the US, and the remainder from other global markets.