Asos to sell Topshop, other brands at Nordstrom stores

Online fashion retailer Asos has formed a joint venture with US department store chain Nordstrom which will see its Topshop, Topman, Miss Selfridge and HIIT brands sold in stores across the pond.

Nordstrom will invest for a minority interest in the brands and Asos said the JV will help drive growth and pave the way for "exploration of a new wider strategic partnership aimed at building greater awareness and engagement in the US and Canadian market".

Nordstrom operates more than 350 physical stores in North America. It already has a history with Topshop, having been the first US retailer to offer the brand in 2012.

As part of the JV, Asos will retain operational and creative control, but work with Nordstrom "to leverage its US market expertise and extensive customer reach to build an exciting future for these brands in their second biggest market".

Chief executive officer Nick Beighton said: "With its long-established connection to Topshop, extensive US consumer insight and unparalleled reach right across North America, Nordstrom is the right partner to help Asos accelerate the growth of our Topshop and Asos brands in this key market.

"Asos is all about giving customers the confidence to be who they want to be. Partnering with Nordstrom will support our US strategy, allowing us to offer that to even more 20-somethings in North America. We're excited about the opportunities ahead, collaborating to deliver the best product through engaging, friction-free multi-touch experiences and we can't wait to see our Asos edit in Nordstrom stores."

Broker Peel Hunt, which has a ‘buy’ rating and 6,500p price target on the shares, said: "We see this as an excellent partnership: the battle ahead for Asos is about US customer recruitment and awareness, which can only be accelerated by both the Topshop tie-up and further collaboration."

Shore Capital, whose rating for Asos is under review, said: "We are not completely surprised by the news this morning, as Asos has mentioned the partnership with Nordstrom in previous presentations.

"The move to cement Asos's position in the US is another ‘first’ for the company and comes after the recent Arcadia brands' acquisition. We see this series of actions as necessary to maintain relevance in a fast-moving and competitive space, after several players have doubled down on their beauty offers (i.e., Zalando/Sephora partnership, Boohoo's acquisition of Debenhams) and have put Asos’ Face+Body offer under pressure, in our view.

"However, we question the need to set up a JV with a physical retailer, which casts doubts on the Asos business model's sustainability as a stand-alone in the future."