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Boohoo buys Dorothy Perkins, Burton and Wallis for £25m

<span>Photograph: Hollie Adams/AFP/Getty Images</span>
Photograph: Hollie Adams/AFP/Getty Images

Online fashion retailer Boohoo has bought Dorothy Perkins, Wallis and Burton for £25m, completing the break up of Sir Philip Green’s Arcadia Group.

The deal to buy the three remaining brands out of administration does not include any of their 214 UK stores, which will permanently close and put about 2,450 jobs at risk.

Boohoo said on Monday that it had agreed to buy “the e-commerce and digital assets and associated intellectual property rights, including customer data, related business information and inventory of the Burton, Dorothy Perkins and Wallis brands”. Only 260 head office roles – involved in design, buying, merchandising and digital operations – will be transferred to Boohoo under the deal.

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The Manchester-based company said the takeover would be completed by Tuesday and that all three brands would be fully integrated by May this year.

The deal comes just weeks after Boohoo bought the Debenhams brand in a £55m deal that also excluded its high street sites, leading to the likely loss of up to 12,000 jobs.

Boohoo revealed in January it was in exclusive talksto buy Dorothy Perkins, Wallis and Burton, as administrators at Deloitte sought buyers for the remaining brands in the Arcadia empire, which went into administration last year.

Online retailer Asos bought Arcadia brands Topshop, Topman and Miss Selfridge last week for £330m. The brands-only deal did not include any of the stores or warehouses. At least 2,500 high-street shop workers are at risk of losing their jobs as a result. Arcadia’s plus-size clothing brand, Evans, was sold to the Australian retailer City Chic Collective for £23m in December.

So far, administrators have raised more than £500m from selling Arcadia’s assets, which will be distributed to the company’s creditors. A report by the administrators, seen by the Guardian, suggested Green’s family was likely to receive £50m from the sale, relating to an interest-free loan it made to the group in 2019 at the time of an emergency restructure. However, more than 1,000 suppliers and landlords to the high-street fashion chain are expected to get less than 1% of the money owed to them.

Commenting on the latest deal, the Boohoo chief executive, John Lyttle, said: Acquiring these well known brands in British fashion out of administration ensures their heritage is sustained, while our investment aims to transform them into brands that are fit for the current market environment.

“We have a successful track record of integrating British heritage fashion brands on to our proven multibrand platform, and we are looking forward to bringing these brands on board.”

Boohoo shares were down more than 4.6% at 348p each on Monday morning.

Boohoo also confirmed on Monday that it was ordering its Leicester-based suppliers to stop using outside labour and subcontractors, and bring all clothes-making in house by 5 March.

It is part of efforts to increase transparency around Boohoo’s supply chain, after a damning independent review by Alison Levitt QC found media reports of poor working conditions were “substantially true”.

Last year an investigation by the Guardian found that factories in Leicester making the company’s clothes were failing to pay workers the minimum wage and were putting the health of staff at risk during lockdown.

Boohoo said in a statement: “One of the key recommendations from the Alison Levitt QC review was to consolidate our supply chain.

“Supporting suppliers to bring their CMT [cut, make and trim] units in house, shortens our supply chain and is just one of the ways that we are helping them to build stronger more sustainable businesses that can thrive.”