Boohoo buys Karen Millen and Coast
An initial wave of 62 redundancies has been announced.
Fast-fashion internet giant boohoo has bought the online businesses of Karen Millen and Coast, in a move which is likely to see the brands disappear from the high street.
An initial 62 job losses have been announced as part of the deal, while over 1,000 more are in danger across 32 UK stores and 177 concessions.
The brands were put into administration on Tuesday before being immediately sold to boohoo, in a process known as a pre-pack.
Administrators at Deloitte said the stores would continue to trade for a short time while they realise the company’s assets.
Bosses of the company said adding the brands to its roster, which already includes PrettyLittleThing, Nasty Gal and MissPap, would help it gain customers in the crowded online fashion market.
Chief executive John Lyttle 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.”
Karen Millen has been loss-making for years, losing £5.7 million in 2018 and £11.9 million a year earlier.
Coast has also struggled, in part due to its locations in several Debenhams and House of Fraser stores, which have both had their own high street woes in recent years.
By comparison, boohoo revealed a 39% jump in sales in the three months to May 31.
Retail analysts at Jefferies said investors should welcome the decision.
They said: “Karen Millen and Coast are both strong UK brands, in our view, with distinctive premium ranges, including work wear and occasion wear, that would complement the existing group brands.
“If acquired, we would expect boohoo to keep the creative teams and brand marketing completely separate but seek to leverage its efficient sourcing, distribution and IT infrastructure to grow the business globally and make it more profitable.”
They added that sales for the brands are likely to be around £40 million to £50 million.