Asos, which has faced severe headwinds amid the cost-of-living crisis and competition from China's Shein, also forecast annual sales to be slightly below previous estimates but added that adjusted core profit would be at the top end of market expectations.

Shares in the company were up almost 14% in early London trade.

Heartland – which has a 28% stake in Asos - will hold a 75% of the joint venture worth £135m, while Asos expects to receive £118m in net proceeds and will hold the remaining 25%. The deal will grant Asos some design and distribution rights for the two brands in return for royalties, enabling it to continue marketing and selling them online.

Asos said it expected earnings before interest, tax, depreciation and amortisation (EBITDA) to take a £10m - £20m hit. It bought the two brands along with Miss Selfridge and HIIT, in 2021 from Philip Green’s collapsed Arcadia group for £265m.

“The joint venture and the launch of the refinancing will accelerate our strategy to both offer customers the best and most relevant product and to turn ASOS into a company that delivers sustainable, profitable growth,” said chief executive José Antonio Ramos Calamonte.

Asos also announced an amendment and extension of its existing facilities agreement with Bantry Bay Capital to May 2027 with an option for a 12 month extension and would launch an offering of £250m convertible bonds due 2028 and repurchase part of its outstanding £500m 0.75% convertible bonds due 2026.

Reporting by Frank Prenesti for Sharecast.com