Fashion retailer Boohoo has bought collapsed rival Debenhams for £55m to relaunching it as an online only store.
The 242-year-old department store started a liquidation process last month after failing to secure a last-minute rescue sale.
Debenhams has been in administration since April last year but its problems pre-date the coronavirus crisis that has hurt so many high street retailers.
The cut-price deal for the brand name, intellectual property and customer lists will eventually result in the closure of Debenhams’ 118 remaining stores as none of the sites are included in the sale.
Administrators at FRP Advisory confirmed stores would, once allowed under COVID-19 restrictions, re-open only for the purpose of clearing stock – with a fire sale continuing online presently.
The developments leave more than 10,000 staff facing the prospect of redundancy, though it was hoped there would be some limited opportunities for Debenhams staff to secure roles with Boohoo.
Boohoo said: “Debenhams is a long-standing and leading UK fashion and beauty retailer with high brand awareness, and an established online platform with approximately 300 million UK website visits per annum.
“This makes it a top 10 retail website in the UK by traffic.
“The transaction represents a fantastic opportunity to grow the group’s target addressable market and increase the share of wallet opportunity through a new capital light and low-risk operating model that is complementary to the group’s highly successful direct-to-consumer multi-brand platform.”
Boohoo said the relaunch of the Debenhams online sales platform, expected in a year’s time, would include new categories including beauty, sport and homewares.
Joint administrator Geoff Rowley said: “We are pleased to have secured the future for this great brand, and to have created the opportunity for a new Debenhams-branded business to emerge in a different shape beyond the pandemic.
“I expect that the agreement with Boohoo may provide some job opportunities but we regret that this outcome does not safeguard the jobs of Debenhams’ employees beyond the winding down period.”
Meanwhile, ASOS has said it is in pole position to snap up the most valuable brands, including TopShop, within Sir Philip Green’s collapsed Arcadia empire.
The online fashion retailer issued a short statement to the City on Monday morning to announce it was in “exclusive” talks with administrators.