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Strong customer overlap makes ASOS best suitor for young Arcadia brands, says GlobalData

Following reports that ASOS is in talks to buy Topshop, Topman and Miss Selfridge out of administration:

Chloe Collins, Senior Apparel Analyst at GlobalData, a leading data and analytics company, offers her view on this news;

“ASOS would by far be the most complementary new owner for Topshop, Topman and Miss Selfridge. The brands are already popular sellers through its third-party platform, proving that there is strong customer overlap, and ASOS’ impressive global reach would help the Arcadia brands target new shoppers. Though ASOS would not take on any stores, and it is unclear whether it would keep the brands’ websites or simply use exclusivity to boost its own platform, the retailer’s digital prowess will aid the brands in gaining top of mind appeal, as they have so far fell behind online competition.

“The fact that ASOS is willing to buy three of Arcadia’s brands should also give it an edge, as other interest has centred around the Topshop brand only. Following Next’s retreat from the bidding process last week, the biggest competition ASOS faces for Topshop comes from JD Sports and Authentic Brands’ partnership, as the two retailers’ experience in running physical stores may mean they place a higher bid to keep some of the brands’ stores. While Chinese online specialist Shein is also a frontrunner, it is relatively new to the UK market, and its brand equity is far weaker than ASOS’. A bid has also been made by the Issa brothers, who recently acquired ASDA, however their specialism in value clothing for family shoppers, means they may struggle to understand Topshop’s young market and give the brand the revival it desperately needs.”

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