British e-tailer Boohoo has purchased two other U.K. brands—Karen Millen and Coast—and the future of their stores and operations hangs in the balance.
Boohoo’s 18.2 million pound bid ($22.14 million) on the two companies was announced Tuesday, and the cash pre-pack administration deal has been finalized, according to a company statement.
Now, decisions must be made about what’s to be done with Karen Millen and Coast’s 32 High Street retail stores and 177 concessions. Combined, those operations employ a total of 1,100 people, according to a report from the BBC.
An online-only retailer, Boohoo will likely seek to close down its new acquirees’ physical operations, possibly over the next few months, according to an administrator from Deloitte, Rob Harding, who was appointed by Karen Millen. While Deloitte declined to cite a definitive time-frame for store closings, the group did say 62 immediate workforce redundancies have already been identified within the companies’ operations.
“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,” said John Lyttle, Boohoo’s CEO, underscoring the company’s intent to grow its online business. The former Primark executive did not comment on plans for the companies’ retail stores.
However, in a statement from Deloitte administrators, Harding said, “Karen Millen has been seeking to address the financial challenges that it faced by pursuing a sale of the business and, whilst a sale of the whole business has not been deliverable, the Boohoo transaction facilitates the survival of these iconic British brands through an online platform.”
In its release announcing the acquisition, Boohoo said that direct online sales from the websites of Karen Millen and Coast totaled 28.4 million pounds ($34.4 million) over the most recent financial year ending in February 2019. Karen Millen bought parts of the Coast business after the company went into administration last year.