By Steve Goldstein
Boohoo and ASOS shares rose on Monday, as investors warmly greeted their plans to snap up, or attempt to purchase, bankrupt retailers.
Boohoo /zigman2/quotes/205655689/delayed UK:BOO -1.79% shares rose 4%, as the company said it was buying the assets of fashion and beauty retailer Debenhams from its administrators for £55 million in cash.
Boohoo said it will rebuild and relaunch the Debenhams platform — but not the physical stores — to focus on fashion, beauty, sport and homeware.
“It believes that the brands and website will help it create the U.K.’s largest marketplace and position it to propel into international expansion. It sees acquiring the home, beauty and sports assets sold by Debenhams as a big prize, allowing it to enter new markets, and expand from its pure fashion base,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
ASOS /zigman2/quotes/209092221/delayed UK:ASC -1.30% shares rose 5%, as the company said it is in exclusive talks with the administrators of Arcadia to buy the Topshop, Topman, Miss Selfridge and HIIT brands. ASOS said any deal would be funded from cash reserves, meaning it won’t issue debt or equity.
“ASOS clearly wants to just scoop up the cream from Sir Philip Green’s retail trifle, leaving the more unappetizing remains left out for others to pick over. Brands like Burton and Dorothy Perkins are likely to be a much harder sell, in a very competitive midmarket,” she added.
The large-cap FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.76% drifted 0.3% lower, underperforming the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.89% . The FTSE 100 has dropped for two straight weeks but still is higher in January.
U.K.-listed travel stocks including International Consolidated Airlines Group /zigman2/quotes/208070069/delayed UK:IAG +3.00% , Wizz Air /zigman2/quotes/210449062/delayed UK:WIZZ +2.75% and easyJet /zigman2/quotes/202825892/delayed UK:EZJ +5.64% slumped around 6%. With Wizz Air and easyJet reporting this week, analysts at Bank of America say the focus will be on the summer outlook and their cash burn.