As businesses continue to infiltrate the virtual sphere, online retailer Boohoo has acquired High Street brand Debenhams for £55m.
While the deal saves the department store from becoming completely obsolete, it will result in 118 shops closing and 12,000 jobs are now at risk.
Boohoo, which has already bought a number of High Street brands out of administration including Oasis, Coast and Karen Millen, said it was a "transformational deal" and a "huge step".
Debenhams had been trading for more than 240 years and is currently in the process of closing down, after administrators failed to secure a rescue deal for the business.
“The group will only be acquiring the brands and associated intellectual property rights,” Boohoo said.
“The transaction does not include Debenhams’ retail stores, stock or any financial services.”
Debenhams made approximately £400m in online revenues in its most recent financial year to 31 August 2020.
Boohoo said the Debenhams website receives 300m visits a year, making it a top 10 retail website in the UK by traffic.
In a separate deal, Asos says it is in "exclusive" talks to buy the Topshop, Topman, Miss Selfridge and HIIT brands out of administration. However, the online retailer said it only wanted the brands, not their shops, hinting that any deal would cost jobs.
Sir Philip Green, who is the current owner of Arcadia Group, fell into administration last November, putting 13,000 jobs at risk.
A closing-down sale at 124 Debenhams stores began in December, as the administrators continued to seek offers for all or parts of the business.
The company announced recently that six shops would not reopen after lockdown, including its flagship department store on London's Oxford Street.
The retail trade union Usdaw said it was seeking urgent meetings with Debenhams’ administrators and called on the government to do more to save high streets.
Boohoo said Debenhams was expected to relaunch on Boohoo's web platform later this year.
In the meantime, Debenhams will continue to operate its website for an agreed period.
Dave Gill, Usdaw’s national officer, said: “It is devastating news for our high streets that Debenhams’ administrators have sold the company brand to an online-only retailer. Throughout Debenhams’ difficulties the company and then administrators have refused to engage with Usdaw; the staff are being treated appallingly.”
Debenhams has struggled for years with falling profits and rising debts, as more shopping has moved online. It called in administrators twice in two years, most recently in April 2020.
The firm had already trimmed its store portfolio and cut about 6,500 jobs since May, as it struggled to stay afloat.
The deal with Boohoo marks a final rebuff for Mike Ashley’s Frasers Group, the owner of Sports Direct, which had been in talks to buy Debenhams for some weeks after failing to gain control of the department store before its first fall into administration in 2019.
Ashley is expected to try to take on a number of Debenhams stores from landlords to house his Flannels, Sports Direct and House of Fraser chains.