"This is a transformational deal for the group"
Online retailer Boohoo has bought the Debenhams brand and website for £55 million.
However, remaining stores will still close down, which will see up to 12,000 jobs lost.
The 242-year-old Debenhams chain is already in the process of closing down after administrators failed to secure a rescue deal for the business.
A closing-down sale at 124 Debenhams stores began in December 2020, as administrators continued to seek offers for all or parts of the business.
It had been announced that six shops would not reopen after lockdown. This includes its flagship department store on London’s Oxford Street.
FRP Advisory, Debenhams UK’s administrators, said they had undertaken a “thorough and robust process” to achieve “the best outcome for Debenhams’ stakeholders”.
They added: “This transaction will allow a new Debenhams-branded business to emerge under strong new ownership, including an online operation and the opportunity to secure an international franchise network that will operate under licence using the Debenhams name.”
Boohoo has already bought several High Street brands out of administration. It has acquired Oasis, Coast and Karen Millen, but not the associated stores.
Mahmud Kamani, Boohoo’s executive chairman, said:
“This is a transformational deal for the group, which allows us to capture the fantastic opportunity as e-commerce continues to grow. Our ambition is to create the UK’s largest marketplace.
“Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion e-commerce, but in new categories including beauty, sport and homeware.”
Debenhams is set to relaunch on Boohoo’s website in early 2022. It will continue to operate its website for an agreed period.
Boohoo said its plans included “transforming Debenhams through the development of an exciting online marketplace, capitalising on the sector’s structural shift to online”.
It added that it intended to expand Debenhams’ product categories and its supplier partnerships.
The deal is being funded from existing cash reserves.
Boohoo added: “The group will only be acquiring the brands and associated intellectual property rights – the transaction does not include Debenhams’ retail stores, stock or any financial services.”
Due to falling profits, rising debts and as more shopping has moved online, Debenhams has struggled for years.
However, its position became untenable during the Covid-19 pandemic has non-essential shops were forced to close.
After Debenhams was initially put up for sale in April 2020, Sports Direct founder Mike Ashley made an offer in the region of £125 million.
The offer was rejected as being too low.