Arcadia in urgent talks on £30m funding, denies administration report
Topshop owner Arcadia is reportedly in urgent talks to secure fresh funding in order to stay afloat. That's according to a Sky News report at the weekend that said the group has approached "several potential lenders about borrowing roughly £30 million" to support the business. The talks come as the crucial pre-Christmas trading plan has been dented by the current lockdown across England.
The report also said that an agreement to secure the deal is imminent and could happen this weekend. Arcadia has made no comment.
Meanwhile, the company denied a report in the Sunday Times that said Arcadia directors are drawing up plans to place the business into “trading administration”, allowing it to continue being run by current management while buyers are sought for its individual brands that include Dorothy Perkins, Miss Selfridge, Evans and Burton.
A spokesman said: “It is not true that administrators are about to be appointed. Clearly, the second UK lockdown presents a further challenge for all retailers and we are taking appropriate steps to protect our stakeholders from its consequences. All our stores in Wales, Scotland and Northern Ireland have now reopened, and we are continuing to trade online through our own channels as well as those of our partners.”
Arcadia operates more than 500 shops and while those in Wales, Scotland, Northern Ireland remain open, the bulk of its estate is in England and these shops have been forced to close until December 2.
A source told Sky News that the backing was needed due to doubt around the business’s ability to get through the pandemic without further funding.
The company had come close to collapse in 2019 as it won only narrow support for its series of company voluntary arrangements. It has closed a number of its shops and earlier this year it also cut around 500 head office jobs. The group currently employs around 15,000 people.
Sky also said that the pensions regulator is believed to be closely involved in the new talks, given the deficit situation with the company’s pension fund. Eighteen months ago, the company secured pension stakeholder support for its CVAs on the basis of it coming up with a package of assets to support the fund worth around £400 million.
The pensions issue complicates the situation around Arcadia, but so does its heavy presence in Debenhams. The company has a large number of concessions operating in the department store chain, which is itself up for sale but could be forced to liquidate if a buyer isn't found.
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