In the last few weeks, it’s become official that fast-growing online retailer Boohoo have bought established department store Debenhams out of administration for a £55m deal.
Debenhams’ 118 stores will be disappearing from the high street, leaving Boohoo in charge of their brand and eCommerce operations, including its expanded database. It’s becoming more evident that numerous businesses have faced permanent damages in 2020 and in order to survive, retailers need to acclimatise to new consumer behaviour.
Boohoo launched in 2006, although often criticised for its fast fashion approach, it has quickly become one of the most popular online fashion retailers in the UK, US and Europe. Boohoo currently owns PrettyLittleThing, Nasty Gyal and Misspap.
As well as acquiring one of the largest department stores in the UK, Boohoo has since announced its further expansion with the acquisition of Arcadia brands including Burton, Wallis and Dorothy Perkins for a £25m deal. Surprisingly, Boohoo isn’t the only brand to have purchased high street brands, as Asos has taken the same direction signing a £295m deal with Arcadia and taking on board Topshop, Topman and HIIT.
Was this a good move for Boohoo?
Boohoo Group’s acquisition of Debenhams is a ‘huge opportunity’ for the company to increase its UK market share across a wider range of customers. From a business perspective, it’s clear that Boohoo has made a smart, strategic decision, giving the fact that it will now be able to touch customers from different economic backgrounds and demographics, allowing a rapid future growth.
However, many have discussed the negative implications that this decision might have in the long run. Debating whether products will lose their USPs and whether there will be any individuality and differentiation between each brand. Considering the fast expected turnarounds in the online fashion world, these are questions that remain unanswered for many.
How did we score the brands’ performance?
We ran each of the brand’s domain in BOSCO™, using the index to rank the performance and effectiveness of each brands’ digital activity within their category. Here’s how they scored:
• Boohoo – 656
• Debenhams – 649
• Burton – 623
• Dorothy Perkins – 617
• Wallis – 594
Our BOSCO™ score insinuates that the current activity of the two brands is at a steady point, with room for further improvements.
What makes Boohoo a leading retailer?
Boohoo is well known for its strong online presence with spends of over £90m for TV campaigns, over 7m Instagram followers gained through influencer campaigns, regular personalised emails with updates and special discounts. As the company will be taking over the eCommerce operations for Debenhams as well as Burton, Dorothy Perkins and Wallis, it’s thought that it will be rebuilding their websites, as well as launching them on the Boohoo platform.
What will happen next?
It will be interesting to see whether Boohoo will take the same marketing approach with these well-established brands. We can’t exactly predict what direction Boohoo will take, but we are sure that something is going to change. With the retail brands moving to online sales only, it is expected to see a fresh approach to their marketing activity. However, it’s likely that Boohoo will face some challenges in building a new strategy while ensuring that this won’t affect the loyalty of their existing customers.
With more online established brands such as Boohoo and Asos, investing in high street fashion brands, it is clear that the UK fashion world is taking a huge turn and moving more and more towards the online, digitised world. Looking at how 2020 and the pandemic has moved many other brands online, the investment made by Boohoo is undeniably strategic. We’re now left waiting to see what changes will be implemented, which directions these brands will take digitally.
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