Boohoo owner Debenhams sells Nasty Gal for $16m

‘Non-core’ sale part of group’s transformation strategy and follows Sheffield warehouse sale

Boohoo owner Debenhams Group has sold its “non-core” Nasty Gal brand for $16m (£12m) as it continues with its transformation strategy.

Manchester-based Debenhams has offloaded the Nasty Gal brand and the global intellectual property rights to New York’s White Space Group New York, LLC, operating as WSG Brands. In the last financial year, Nasty Gal generated gross merchandise value of £12m and saw an adjusted EBITDA of £0.4m.

Debenhams said of Nasty Gal: “It is non-core and not material to the group”. And it added: “The transaction aligns with our strategy of transitioning to a marketplace-led business model that is capital-lite.”

Group CEO Dan Finley said: “Our turnaround continues at pace. The disposal of this non-core asset aligns with our strategy and further strengthens the balance sheet following the £90m sale of our Sheffield Distribution Centre.”

The group announced last week that it was selling the South Yorkshire building to Primark owner Associated British Foods. After that deal was revealed, ABF announced the warehouse would support a new Primark strategy to start offering home delivery for the first time.

ABF’s chief executive George Weston said: “Primark has made significant progress in building its digital capabilities and will continue this through both growing click & collect and by offering home delivery in Great Britain in the future.

“There is now an opportunity for incremental and profitable growth through this channel.”

Dan Coatsworth, head of markets for AJ Bell, said Primark offering home delivery was the “biggest UK retail news of the year”.

“Having full online transactional capabilities is something the company has always shied away from,” he said.

“It has always argued that low price-point items are uneconomical to send, particularly if someone is only ordering a pair of socks or a T-shirt costing a pound or two.

“It stubbornly retained this view for longer than anyone expected, before easing back by launching a click and collect service.

“We’re now primed for the full home delivery experience. While physical stores remain relevant, online shopping is well established and Primark clearly had no choice but to adapt to the modern retail world.”