Online fashion retailer Boohoo has purchased the online operations of Karen Millen and Coast for £18.2 million in cash.
The two struggling brands were put up for sale by their owner – Icelandic bank Kaupthing – back in June and placed into administration on Tuesday.
They were then immediately sold to Boohoo in a pre-pack sale which allows buyers to choose the parts of the business they want, though the sale does not include physical stores.
Karen Millen and Coast have 32 high street stores and 177 concessions in the UK, employing 1,100 people.
The two brands will continue to trade for a “short time” before closing, according to business services firm Deloitte, who handled the operations.
“Unfortunately, it has been necessary to announce 62 immediate redundancies”, they said.
“Like many high street retailers, Karen Millen has suffered from high product and other cost inflation, decreasing footfall, weaker consumer confidence and a complex global operation in an increasingly competitive market”.
Boohoo’s chief executive John Lyttle said: “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”.
The online retail giant was founded 14 years ago in Manchester and has grown rapidly by selling affordable clothing, shoes, accessories and beauty products.
It currently has 13 million active customer accounts all over the world and purchased the Nasty Gal and Pretty Little Thing brands in 2017.
Richard Lim, chief executive of Retail Economics, said: “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”.
“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”.
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