Asos said the acquisition represents a strategic opportunity in support of its “mission to become the number one destination for fashion loving 20-somethings worldwide. These are strong brands that resonate well with our core customer base”. According to Asos, the brand equity is strongest in the UK and they have an established presence in both the U.S. and Germany, two of Asos’ key strategic markets. “This transaction allows us to bring iconic brands in-house, allowing us to overlay our core strengths and transform them into leading digital first brands”, said Asos, adding that the acquired brands will join its Venture Brands portfolio alongside others, including Collusion, AsYou and Reclaimed Vintage.

“We will retain their established brand and customer positioning, which is differentiated from our core Asos Design and other Asos Brands. This enhances our ability to increase choice for customers offering different customer styles, hero product and price points across our Asos Brands. The brands we have acquired are strong consumer facing brands that have continued to grow through key channels and we see a significant opportunity to drive further growth for these brands globally. We will do so through applying our industry leading design talent and online retail experience. They will also benefit from investment into customer engagement and brand positioning in line with our existing model”, said the British fashion company.

Asos anticipates incremental sales in fiscal year 2022 to be broadly flat to fiscal 2020 acquired brand sales as it focusses on driving growth on its Asos platform and through select strategic retail partnerships. The acquisition is expected to be margin accretive, with strong operating leverage given the relatively low incremental costs of operation once integrated onto the ASOS platform. Asos expects the transaction to deliver a double-digit return on capital (post tax) in the first full year.