By Kristy Dorsey

Asos has become the new owner of Topshop and other leading brands from Philip Green’s crumbled Arcadia empire as online retailers continue to hoover up the remains of former high street powerhouses.

Chief executive Nick Beighton said Asos is “extremely proud” to be taking on Topshop, Topman, Miss Selfridge and HIIT , which will become part of its online-only offering. Asos is paying £265 million in cash for the brands, plus £65m for existing and future inventory.

About 300 of Arcadia’s approximately 13,000 employees will transfer to Asos, mostly in design and product-related roles.

However, the transaction does not include any of the 70 stores operated by the four brands, which will put an estimated 2,500 shop workers out of a job. Neither does the deal cover any of Arcadia’s warehouses or distribution centres, with Mr Beighton noting that Asos already has its own “well-funded” IT and warehousing infrastructure.

READ MORE: Sir Philip Green's Arcadia TopShop retail empire 'on brink of collapse'

Asos is already a leading sales channel for Arcadia brands, with sales through Asos growing faster than through Arcadia’s own e-commerce sites.

“The acquisition of these iconic fashion brands is an exciting moment for Asos,” Mr Beighton told investors. “It is a compelling opportunity to acquire four strong brands that are [a] completely natural fit with Asos.

“We know how they resonate with our core 20-something fashion-loving customer both in the UK and internationally.”

Asos said it sees “particular opportunity” to increase the brands’ reach across the US, where Topshop has a concession agreement with American luxury department store chain Nordstrom.

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Already weakened by a complex financial restructuring in 2019, Arcadia went into administration in November of last year. It was followed the next day by the announcement that department store chain Debenhams, under the control of administrators since April, would be put into liquidation.

Plus-size retailer Evans, which was formerly part of Arcadia, was sold to Australian retailer City Chic in December for £23m. Asos rival Boohoo – which last month acquired the Debenhams brand and website for £55m – is in discussions to buy the remaining Arcadia brands of Burton, Dorothy Perkins and Wallis.

Like the Arcadia brands, Debenhams stores are set to disappear for good. The demise of these and dozens of other retail chains during the pandemic has raised concerns about the future for city centres, including the small businesses that rely on footfall driven by big high street names.

“As online retailer Asos purchases four of the main Arcadia brands, it’s another blow for the high street, putting thousands of jobs at risk and leading to more vacant shops across high streets across the UK,” said Sandra Rowley of takepayments.com, a card payment solutions provider.

READ MORE: Boohoo in talks to acquire Arcadia brands

“As high street giants continue to fold under the pressure of lockdown, it isn’t just the bigger businesses who are worried about the state of Britain’s once-loved high street. Our research of small businesses found that the biggest concern for three in 10 small business owners is the decline of the high street this year.”

Shares in Asos closed nearly seven per cent higher yesterday on confirmation of the deal, which finance director Mathew Dunn said should generate “double-digit” returns in the year to August 2022. Any additional profits in the current year will be cancelled out by an estimated £20m in one-off restructuring and transaction costs.

Asos noted that in the 52 weeks to the end of August, which included the initial five months of pandemic restrictions in the UK, the Topshop, Topman and Miss Selfridge brands made a loss of £1.8m at EBITDA (earnings before interest, tax, depreciation and amortisation) level. HIIT, a sub-brand of Burton, is estimated to have generated a loss of £400,000 across all channels.