Online fashion retailer Asos has agreed to sell a majority stake in its Topshop and Topman brands to Heartland, the investment company of Danish fashion billionaire Anders Holch Povlsen.

The deal, announced on Thursday, will see Heartland acquire a 75 per cent interest in a new joint venture for £135 million, with Asos retaining a 25 per cent stake. Heartland already holds a 28 per cent stake in Asos through its subsidiary Bestseller, and will now have a more significant role in shaping the future of the Topshop and Topman brands.

The transaction comes as part of a broader refinancing effort by Asos, which is seeking to strengthen its balance sheet and refocus on its core business. The company, which purchased Topshop and Topman from Philip Green's collapsed Arcadia group in 2021 for £265 million, will continue to have certain design and distribution rights for the brands in exchange for a royalty fee.

José Antonio Ramos Calamonte, chief executive officer of Asos, stated: "We're pleased to be making this announcement today which is an important step in Asos' continued transformation. The joint venture and the launch of the refinancing will accelerate our strategy to both offer customers the best and most relevant product and to turn Asos into a company that delivers sustainable, profitable growth."

The deal is expected to have a £10 to £20 million negative impact on Asos' earnings before interest, tax, depreciation and amortisation (EBITDA) in the short term, but the company anticipates it will become "increasingly EBITDA accretive over time".

In addition to the Topshop sale, Asos announced a refinancing package that includes the launch of a £250 million convertible bond offering due in 2028 and the repurchase of part of its outstanding £500 million convertible bonds due in 2026. The company has also extended its existing facilities agreement with Bantry Bay Capital to May 2027, with an option for a 12-month extension.

Despite the changes, Asos remains optimistic about its financial performance. The retailer expects its full-year adjusted EBITDA to be at the top end of market consensus estimates, although sales are projected to be slightly below previous guidance.

The move has been well-received by investors, with Asos shares rising 10 per cent in early trading following the announcement. Analysts view the sale as a positive step for the company, which has faced intense competition in Europe from fast-fashion rivals like Shein.

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