Topshop’s landmark Oxford Street flagship is being readied for a potential sale following the collapse of Sir Philip Green’s Arcadia empire.
The £400 million flagship is just one of the billions of pounds of assets at Arcadia and Debenhams being trawled over by rival retailers and property investors for bargains.
The failure of Arcadia last night, putting 13,000 jobs at risk, came just hours before JD Sports - Debenhams’ only potential buyer, walked away, leaving 12,000 jobs in the balance.
Debenhams’ administrators at FRP concluded moments later that they should start winding down the retailer, while continuing to seek offers for all or parts of the business.
At Arcadia, KPMG was today appointed to administer the company that owns the TopShop flagship at 214 Oxford Street. Sources said they would be appointing agents to sell it.
Prior to coronavirus the 100,000 square feet store welcomed 400,000 customers through its doors each week.
It was valued at around £400 million last year when Apollo Global Management provided a four-year senior loan secured against the building.
Retail property values have been hurt since then due to the coronavirus crisis, although the prime location of the building will make it attractive to investors. Sovereign wealth funds and overseas investors are expected to bid.
Property website React News said the Arcadia pension fund would benefit from any potential sales proceeds from the Oxford Street site generated over and above the £310 million loan.
A number of Arcadia brands are also expected to be in demand from rivals. Shares in House of Fraser and Sports Direct owner Frasers Group gained 4% amid hopes it might be a “strong contender to snap up the distressed brands up for sale”, said Susannah Streeter, an analyst at Hargreaves Lansdown.
Likewise, shares in Boohoo and Next gained 2.6% and 1.3% respectively.
Boohoo is a potential buyer of some of Topshop, but not the physical stores. Analysts at Shore Capital, said the online fast fashion retailer “would appear to be in the driving seat as a potential acquirer, having raised shareholder funds for a war chest for acquisitions back in the Spring”.
ASOS was seen as a potential buyer for Arcadia brands, which span from Burton and Wallis to Dorothy Perkins.
Next was seen as a bidder for some of Debenhams, having already opened beauty halls in some of Debenhams’ former stores.
Mike Ashley’s Frasers has already made a play for Debenhams and will look again.
The Hut Group is understood to have been interested in taking on the Debenhams’ website, however it will not pursue that further.
Green is facing calls to cover the estimated £350million shortfall in the company’s pension scheme from his family’s personal wealth.
Property agent JLL estimates there have been 36 administrations on the high street this year.
Tim Vallance, retail chairman at JLL, said: “Covid-19 has simply accelerated the shift to online shopping and there is no vaccine to stop this consumer driven evolution. It turns out that Sir Philip Green isn’t the “king of retail”, but a shop keeper in a world that simply doesn’t need as many shops.”