Boohoo has bought the online operations of rival fashion brands Karen Millen and Coast in a deal that raises fears for hundreds of jobs.
Just hours after it confirmed talks were at an advanced stage, the online specialist said it had completed an £18.2m agreement to purchase the online business and all intellectual property rights.
Not physical stores or space was included.
The retail brands were put up for sale by owner, Icelandic bank Kaupthing, but efforts to find a buyer in a solvent sale fell short.
The so-called pre-pack administration allows the buyer to cherry pick parts of a business.
Boohoo said it would retain all 125 staff who work in the online operations.
It leaves just shy of 1,000 other people – the vast majority employed within 32 shops or 177 concessions – fearing for their jobs. They face redundancy if no buyer emerges.
Business services firm Deloitte, which is handling the sale process, said it had already had to cut staff under the administration process.
It said: “Karen Millen and Coast will continue to trade in store for a short time whilst the administrators realise the other assets of the companies.
“Unfortunately, it has been necessary to announce 62 immediate redundancies.
“Like many high street retailers, Karen Millen has suffered from high product and other cost inflation, decreasing footfall, weaker consumer confidence and a complex global operation in an increasingly competitive market.”
Boohoo said the online business it was buying were “highly complementary”. Its shares were 5% up on Tuesday afternoon.
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.”
It has been a torrid 18 months for UK retail – especially those chains with a deep exposure to the high street.
The pre-pack sale was confirmed just 24 hours after Tesco announced that 4,500 jobs would be affected as part of a reorganisation of its Metro stores.
