Boohoo’s (LON:BOO) share price has jumped in London this Tuesday as the retailer announced that it had bought British brands Karen Millen and Coast. The update comes after the London-listed group confirmed media speculation that it was in talks to buy the businesses.
As of 14:46 BST, Boohoo’s share price had added 6.44 percent to 244.91p. The group’s shares have added more than 22 percent to their value over the past year.
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Boohoo buys Karen Millen and Coast
Boohoo announced in a statement this afternoon that it had completed a deal to for Karen Millen and Coast which were recent put up for sale by Iceland’s Kaupthing Bank. The London-listed retailer acquired the online business and all associated intellectual property rights from the administrators of the brands, both of which entered into administration today, for £18.2 million. Boohoo said that it had funded the deal by existing cash resources.
“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,” Boohoo’s CEO John Lyttle commented in the statement.
Analysts weigh in on acquisition
“It is well known Karen Millen has been struggling in the past few years. But Boohoo will look at it and see another potential revenue stream,” Richard Lim, chief executive of Retail Economics, commented, as quoted by the BBC. “Karen Millen is a different customer segmentation for them, but one that I think could flourish as an online-only proposition. Boohoo will use all the expertise they have acquired in recent years using social media, and bring the brand to a newer audience.”
According to MarketBeat, the London-listed online retailer currently has a consensus ‘buy’ rating, while the average target on the Boohoo share price stands at 267.27p.