Store outlets may be dwindling as a result of the downturn, but there’s been a marked interest in online retail assets in the past few weeks.
Canny business leaders are on the acquisition trail and looking out for bargains. It’s a good way to pick up the assets of fallen companies after their debts have been removed from the equation.
Now strategists have the opportunity to revive traditional names by migrating struggling bricks-and-mortar brands out of the high street.
So, after going into administration over Christmas, the Zavvi brand has been sold off to The Hut Group, which plans to turn it from a mainly high street brand into a purely online retailer.
The same happened to Woolworths (which played a part in Zavvi’s demise). It was acquired by the Barclay Brothers-owned Shop Direct for a reported £5m. Again, the brand will live on only as an online retailer. Much mention was made of Woolworths’s staff not being kept on, illustrating how the costly parts of the business have been stripped out of the deal, leaving only the parts that could yeild high revenue margins.
The sight of retailers poring over the remains of dying opponents for the rich pickings is hardly new. But this is the first time we’ve seen a sustained move by investors paying out purely for retailers’ internet assets — and it’s a sign that internet retailing is perceived by investors as a serious enough part of the business to put some money behind.
Few believe online stores will supplant the high street as a more attractive investment, but it does suggest investors are now also looking at online retail as an option that will appreciate.
Could we see more speculating in the online retailing market? Possibly yes, if the
ToysRUs acquisition of the Toys.com domain name for $5.1m (£3.6m) is anything to go by.
