LONDON, July 12 (Reuters Breakingviews) – Online retailer ASOS (ASOS.L) is taking a contrarian path to continue its growth. US department store operator Nordstrom (JWN.N) has purchased a minority stake in the Topshop, Topman, Miss Selfridge and HIIT brands of the Â£ 5 billion fashion group. In return, ASOS will set up a click and collect service in all 350 Nordstrom stores and sell these brands in some of them.
This appears to be a relatively low-risk way for the Â£ 5 billion online group to expand in the United States. Nordstrom offers a direct route to many US buyers. And ASOS picked up the marks in question from the wreckage of Philip Green’s Arcadia Empire for just Â£ 265million, making it a cheap guinea pig. Still, the choice of a brick and mortar retailer as a partner highlights the fierce competition in online fashion from companies like Zalando (ZALG.DE) and Boohoo (BOOH.L). ASOS is trading at 29 times futures earnings, which is nearly five times richer in multiples than Nordstrom. His choice of unconventional partner raises questions about his ability to pursue such galloping growth. (By Dasha Afanasieva)
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Editing by Neil Unmack and Karen Kwok
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