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Mike Ashley’s Frasers Group, formerly known as Sports Direct, has offered emergency funding to Sir Philip Green’s Arcadia Group and indicated an interest in buying the business if it falls into management.
In a brief statement, Frasers said it had offered Arcadia, which owns Topshop, Topman, Miss Selfridge, Dorothy Perkins and Burton, a loan of up to £ 50 million.
“If the company and the Arcadia Group’s efforts to agree to an emergency financing package fail and the Arcadia Group enters administration, the company would be interested in participating in any sale process,” said Frasers.
A collapse in management would make Arcadia the biggest corporate victim of the Covid-19 pandemic and could spell the end of Green’s long retail career. The businessman is under pressure from parliamentarians and unions to use his private fortune to cover the huge deficit in the pension plan of his retail empire.
On Friday, it emerged that talks between Green and potential lenders for a £ 30 million loan had failed. Arcadia had been seeking additional funding to help close the gap for lost sales during non-essential store closures, including clothing stores during Covid-19 closures.
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It is understood that Green and Arcadia favor a so-called “levity” business management to protect the company from creditors, while the managers seek a buyer for all or part of the business.
The future of Debenhams is also tied to the fate of Arcadia. Arcadia’s collapse could jeopardize JD Sports’ acquisition of Debenhams, as the department store chain rents space to dozens of Arcadia-owned stores.
Ashley bought the House of Fraser department store chain out of management in 2018 and is seen as a potential savior for Arcadia and Debenhams.
