Online fashion giant ASOS has bought Topshop as part of a $364 million deal, but the retailer's physical stores will still close

• ASOS has bought Topshop, Topman, Miss Selfridge, and HIIT for £265 million ($364 million).
• The brands were part of the Arcadia Group, which fell into administration in December.
• They generated a combined £1 billion ($1.4 billion) in revenues in 2019, falling to £265 million ($364 million) in 2020 during the pandemic.

British fast-fashion giant ASOS has bought Topshop, Topman, Miss Selfridge, and HIIT for £265 million ($364 million), it announced Monday.

The brands were part of fashion tycoon Philip Green's Arcadia Group, which fell into administration in December.

ASOS, which sells its products solely online, hasn't bought the brands' physical stores, which will all shut, putting thousands of jobs at risk.

Making the four brands online-only aligns with the shift of fashion retail from brick-and-mortar stores to digital, which has accelerated during the pandemic. Topshop, Topman, Miss Selfridge, and HIIT generated approximately 60% of their 2020 revenues online.

In a letter to investors, ASOS said it bought the brands because they complement its existing portfolio and are established in the US and Germany, with around half of their 2020 sales coming from non-UK markets.

It also called the deal "financially attractive," noting that the four brands generated a combined £1 billion ($1.4 billion) in revenues in 2019, though this fell to around £265 million ($364 million) in 2020 because of the pandemic. The purchase will bring around £20 million ($27.5 million) in one-off restructuring and transaction costs, ASOS said.

The Arcadia Group, which also owns the Dorothy Perkins, Wallis, Evans, Burton, and Outfit brands, fell into administration in December, putting more than 13,000 jobs at risk. It is one of the UK's biggest corporate casualties of the COVID-19 pandemic so far.

The group owns more than 500 stores, though in 2019 Topshop filed for bankruptcy in the US and shut all of its 11 stores there.

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The Arcadia Group isn't the only high-street brand struggling. In January, Primark said sales were down 30% year-on-year in the quarter, adding that lockdown-mandated store closures across the UK and Europe could cost it £1.05 billion ($1.43 billion) in lost sales.

And department-store chain Debenhams announced in December it would enter liquidation after its falling sales were hit further by the pandemic, though online fashion brand Boohoo has since stepped in to buy Debenhams' brand and website for £55 million ($75 million). Debenhams' 118 stores will still close, leaving 12,000 jobs at risk.

Where traditional apparel retailers have struggled, e-commerce brands like ASOS have boomed. It more than quadrupled its profits in the year to August thanks in part to high demand for online sales of sportswear, makeup, and skincare products during the waves of government-mandated lockdowns, which forced high street stores to shut.

"ASOS has demonstrated its belief that there is still life in many underinvested High Street brands - just not on the High Street," Jonathan Reynolds, associate professor in retail marketing at the University of Oxford's Saïd Business School, told Insider.