Boohoo clinches £18.2m acquisition of Karen Millen and Coast

Manchester-based online retail group boohoo has completed an asset purchase agreement for renowned British brands Karen Millen and Coast.

The brands were recently put up for sale by Icelandic bank, Kaupthing.

The group has acquired the online business and all associated intellectual property rights from the administrators of Karen Millen Fashions Limited and Karen Millen Retail Limited, both of which entered into administration on August 6, for £18.2m, funded by the group’s existing cash resources.

Founded by Karen Millen and Kevin Stanford in 1981, Karen Millen is known globally for creating beautifully crafted fashion for confident women who know their own style.

Coast was founded in 1996 with the belief that life is for living, fashion should be fun and dressing up is for every day.

Bosses at Boohoo believe that the online business of these brands are highly complementary additions to the group’s scalable multi-brand platform and their acquisition extends the group’s offer as part of its vision to lead the fashion e-commerce market globally.

In its most recent financial year to February 2019, unaudited management information shows that direct online sales from the websites of Karen Millen and Coast totalled £28.4m.

John Lyttle, Boohoo Group chief executive, said: “The acquisition of the online business of two great and renowned British brands in Karen Millen and Coast represents another milestone in the group’s growth story as it continues to invest in its scalable multi-brand platform and gain further share in the global fashion e-commerce market.”

Boohoo made no reference to its plans for the high street portfolio of the two chains.

There are fears that more than 1,000 staff working in Karen Millen and Coast stores could face the axe if Boohoo opts to incorporate the acquisitions into its online portfolio.

There are 32 UK high street stores at risk, as well as staff in 177 concessions, which total 1,100 employees in all.

These stores and concessions are now likely to close, although administrator Deloitte confirmed stores would trade for a “short time”.

However, this is understood to mean months, rather than a few days.

So far there have been 62 redundancies made at Karen Millen and Coast.

Joint administrator Rob Harding said: “As we continue to see, the retail trading environment in the UK remains extremely challenging.

“Karen Millen has been seeking to address the financial challenges that it faced by pursuing a sale of the business and, whilst a sale of the whole business has not been deliverable, the Boohoo transaction facilitates the survival of these iconic British brands through an online platform.”