Asos shares boosted as online retailer sells Topshop and Topman stake for £135m

Heartland is the holding company belonging to Danish billionaire Anders Holch Povlsen, and also owns clothing retailer Bestseller, which runs 2,800 retail stores across 30 countries. It holds a significant stake in Asos.

Asos will get £135 million for its stake in the two brands, which have not operated physical shops since they came under the online shop’s umbrella several years ago but are valued at £180m under the terms of the deal.

It said it will also have the right to sell a further five per cent in the brands for £9 million at a later date, as part of the deal.

Chief executive Jose Antonio Ramos Calamonte said the move will help “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”.

Asos bought high street stalwarts Topshop and Topman out of administration in 2021, along with Miss Selfridge and HIIT, for £330 million, during the collapse of Sir Philip Green’s Arcadia Group.

However, the retailer has also been struggling of late, plunging to a £120 million half-year loss in April as sales plummeted nearly 20 per cent.

In a trading update on Thursday morning Asos said it has made “progress” on a turnaround plan that has seen it try to sell more of its own-brand clothes this year.

The company said it is also using artificial intelligence to “better understand” why people are returning clothes orders.

Mr Calamonte said: “We're pleased to be making this announcement to which is an important step in Asos' continued transformation.

“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.

"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."

Mr Holch Povlsen was named as Scotland’s richest man in this year’s Sunday Times rich list, and is reportedly the country’s biggest landowner.

As well as owning a retail empire including Bestseller, which was founded by his parents in 1975, he owns about 220,000 acres in the Highlands.

Heartland chief executive Lise Kaae said the deal will bring “the best of the Topshop and Topman brands to customers globally, while supporting Asos’s strategy to obtain a more efficient capital allocation”.

​Asos has also announced a £250m convertible bonds offering in the company.

It said it is also going to use money from the Topman stake sale to partially repurchase £500m worth of a previous convertible bonds offer due to mature in 2026 to help reduce the company’s net debt position.

The new bond offer will mature in 2028 and allow purchasers to subscribe to up to £100,000 each.

The company has also announced an amendment and extension of its existing facilities agreement with Bantry Bay Capital to May 2027 with an option for a 12 month extension.

Its trading update added: “Asos has made good progress on its Back to Fashion strategy, focused on bringing the best fashion and most inspirational experience to its twenty-something fashion-loving customers and delivering sustainable, profitable growth.”

Shares in Asos went up by 14 per cent in Thursday morning trading following the announcements.