Clothes website Boohoo has tied up a £25.2 million deal to buy troubled Arcadia brands Dorothy Perkins, Wallis and Burton.
The clothing empire – which snapped up Debenhams last month – confirmed all three would move online, as the deal does not include the brands’ retail stores, concessions or franchises – with around 214 stores to close.
Around 2,450 staff will lose their jobs, with those working in the Aberdeen, Peterhead and Inverness branches at risk. Some will move to the online operation.
It comes after Sir Philip Green’s Arcadia entered administration in December.
Last week, Asos bought other Arcadia brands, including Topshop and Topman.
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Boohoo chief executive John Lyttle said: “We are delighted to announce the acquisition of the assets associated with the online businesses of the three established brands Burton, Dorothy Perkins and Wallis.
“Acquiring these well-known brands in British fashion out of administration ensures their heritage is sustained, while our investment aims to transform them into brands that are fit for the current market environment.
“We have a successful track record of integrating British heritage fashion brands onto our proven multi-brand platform, and we are looking forward to bringing these brands on board.”
Boohoo chairman Mahmud Kamani added: “This is a great acquisition for the group as we extend our market share across a broader demographic, capitalising on growth opportunities as more and more customers shop online.
“We continue to grow our portfolio of brands and customer base, strengthening our position as a leader in global fashion e-commerce.”
In a separate statement, administrators from Deloitte confirmed that around 2,450 staff will lose their jobs at the brands’ remaining 214 stores, which will permanently close.
Staff have been emailed this morning and will be informed over the course of the day.
Approximately 260 jobs will be moving with the brands to Boohoo, mainly head office functions such as brand design, buying and merchandising, and the digital part of the business. Some other staff will also go through a transition period for a few months.
It means that all of Arcadia’s brands have been sold out of administration.
Administrators still have some property to sell from the business. They have raised £500 million to pay off creditors so far.
Aberdeen City Council co-leader Douglas Lumsden said the loss of the brand’s physical premises will be felt by high streets across the country.
He said: “It’s really bad news not just for Aberdeen city centre, but city centres throughout the UK.
“What we need is some real serious action by government. We need to find a way for smaller independent shops to open up in the city centre.
“They’re being hampered right now by huge business rates, so I would like to see some help from the Scottish Government to allow local councils to have business rates schemes that could allow local shops to go into these units that have been vacated by the Arcadia group.”
John Pascoe, chairman of the business improvement district (BID) group Rediscover Peterhead said: “It’s following a trend of companies being opportunist and picking up the brand names of these failed businesses, but not following through with taking on the brick and mortar shops.
“It’s part of an ongoing reshaping of town centres, which brings a challenge to everybody that has a presence in them.
“In the overall scheme of things, any individual business vacating a premises for whatever reason is not good, but it’s not the end of the town centre when one retail business closes.
“It’s difficult trading conditions right now in these unprecedented times, and just like every town we’re working through it to find out where we’ll be on the other side.”
Mike Smith, manager of Inverness Bid said: “I think it’s really disappointing, the way that this has evolved given the history of Arcadia and its owner.
“It will have an effect, and one hopes that the other businesses in the same field will be able to pick up the slack.
“It’s good for the public to remember the message of use it or lose it, so perhaps that will be a message that will now get out even more now than it has recently.
“Any loss is unfortunate, but it’s just one of those things the economy is going to have to deal with, and there will be opportunities for others that are still trading and doing okay.”
Adrian Watson, CEO of Aberdeen Inspired, said: “It is disappointing to receive confirmation of these closures, with thousands of jobs being lost nationally, which sadly includes those that worked in the Aberdeen City Centre stores.
“With so many losing their livelihoods, the human cost is considerable, and this comes hard on the heels of so many other well documented stores closures on our high street.
“We understand the current operating environment couldn’t be more difficult for bricks and mortar retail and it is thus imperative that government continues to support the industry, and with that our town and city centres.
“For instance, introducing a more equitable and relevant tax system, with consideration to replacing business rates through a sales tax, will allow our businesses to be on a more level playing field with the large e commerce organisations such as Amazon that pay relatively little.”