On the January 25 this year, the fashion retailer Boohoo agreed to pay £55m to acquire the brand and online operations of collapsed rival Debenhams in a cut-price deal.
Society typically assumes that fire sales - i.e. the sale of assets at a very low price, often when an organisation is struggling - destroy value. However, when we studied the acquisitions made by more than 21,000 companies over more than 30 years and examined the dynamics behind fire sales, we found they have a brighter side, with benefits to society and fewer welfare costs than is widely understood.
Moreover, during a recession the effects can be particularly pronounced. Our findings are relevant to business owners, policy makers and anyone considering a merger or acquisition.