Boohoo buys online businesses of Karen Millen and Coast putting more than 1,000 jobs at risk

Fast-fashion internet giant Boohoo has bought the online businesses of Karen Millen and Coast, putting more than 1,000 jobs at risk.

An initial 62 job losses have been announced as part of the deal, while 1,100 jobs are in danger across 32 UK stores and 177 concessions.

The move is likely to see the brands disappear from the high street, as Boohoo confirmed they have only acquired the online businesses and not the brick-and-mortar stores.

Karen Millen and Coast were put into administration on Tuesday before being immediately sold to Boohoo for £18.2 million, in a process known as a pre-pack.

Administrators at Deloitte said the stores would continue to trade for a short time while they realise the company's assets.

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Bosses of the company said adding the brands to its roster, which already includes PrettyLittleThing, Nasty Gal and MissPap, would help it gain customers in the crowded online fashion market.

Chief executive John Lyttle said: "The acquisition of the online business of two great and renowned British brands in Karen Millen and Coast represents another milestone in the group's growth story as it continues to invest in its scalable multi-brand platform and gain further share in the global fashion e-commerce market."

Karen Millen has been loss-making for years, losing £5.7 million in 2018 and £11.9 million a year earlier.

Coast has also struggled, in part due to its locations in several Debenhams and House of Fraser stores, which have both had their own high street woes in recent years.

Online sales from the websites of Karen Millen and Coast totalled £28.4m up to February 2019.

The two brands could disappear from the high street as a result of the buy-out. Credit: PA

By comparison, Boohoo revealed a 39% jump in sales in the three months to May 31.

Retail analysts at Jefferies said investors should welcome the decision.

They said: "Karen Millen and Coast are both strong UK brands, in our view, with distinctive premium ranges, including work wear and occasion wear, that would complement the existing group brands.

"If acquired, we would expect Boohoo to keep the creative teams and brand marketing completely separate but seek to leverage its efficient sourcing, distribution and IT infrastructure to grow the business globally and make it more profitable."

125 staff will transition over to Boohoo group from following areas of design, buying, merchandising, product development and marketing.

The brands will relaunch in time for Autumn and Winter under Boohoo's platform.

Boohoo hope to capture greater market shares and take share in the global fashion market.

They added that sales for the brands are likely to be around £40 million to £50 million.