Arcadia completes Topshop flagship’s £310m refinancing

Mike Ashely’s Frasers Group reportedly working on £50m rescue loan for Arcadia
Frasers Group CFO: "We hope that Sir Philip Green and the Arcadia Group will contact us to discuss how we can support them and help save as many jobs as possible."
// Future of Topshop’s jewel in the crown on Oxford St is now secure after successful £310m refinancing
// The new deal lasts four years with Apollo Management International
// The mortgage had been scheduled to expire in June this year, but was extended as part of Arcadia’s CVAs

Arcadia Group is now able to keep its Topshop and Topman flagship on London’s Oxford Circus after announced that it has completed a refinancing of its mortgage.

The Sir Philip Green-owned firm confirmed that it struck a deal to keep the store open through a £310 million remortgage with Apollo Global Management, an American private equity firm.

Green’s hunt for someone to remortgage the building has been going on for months since it first came to light in September.


“The Arcadia Group Ltd is pleased to confirm it has completed the refinancing of its £310 million loan on 214 Oxford Street for four years term with Apollo Management International LLP,” Arcadia said in a statement.

The news comes the same week Topsop chief executive Paul Price announced his resignation, as first reported by Retail Gazette.

Around 400,000 customers stream through the doors of the flagship Topshop store on Oxford Street each week.

According to the real estate adviser Altus Group, the store saw its business rates bill rise to £3,835,680 on April 1 this year, up 63 per cent by £1,488,500 compared to the bill in the final year before the 2017 revaluation came into effect.

The original mortgage for the retailer’s jewel in the crown flagship store was provided in 2014 by a consortium of banks, led by Royal Bank of Scotland.

It had been scheduled to expire in June this year, but was extended as part of Arcadia’s seven CVAs, which were approved by 75 per cent of creditors in June.

The CVAs entail around 48 store closures in the UK and Ireland and rent reductions on 194 other stores, 11 Topshop store closures in the US, and more than 500 job cuts.

Arcadia also owns Burton, Dorothy Perkins, Miss Selfridge, Wallis, Outfit and Evans.

In accounts for the financial year ending September 1, 2018 – filed at Companies House in September this year – the Topshop and Topman fashion chains on their own saw pre-tax losses deepen significantly to £505.1 million.

This came against losses of £3.9 million the previous year and followed a nine per cent drop in sales to £847 million.

Topshop and Topman’s results were hit by £488.8 million in charges, including for onerous shop leases on loss-making stores and write downs on the value of assets.

For Arcadia as a while, the retail empire swung to an operating loss of £137.5 million for the period – a stark contrast to the £119.3 million operating profit recorded in 2017.

It also booked a full-year pre-tax loss of £93.4 million, compared to a pre-tax profit of £164.5 million the year prior.

Meanwhile, EBITDA plunged 40 per cent year-on-year, dropping from £137 million in 2017 to £76 million in the latest full-year results.

The retail giant also saw turnover drop by 4.5 per cent year-on-year to £1.8 billion, which it attributed to “the ongoing challenge global market conditions for retailers”.

Arcadia said it had been impacted by reduced profitability from its bricks-and-mortar stores, and that it was not possible to reduce store costs when in-store sales were declining simultaneously.

The same accounts saw Arcadia confirm that the £310 million had been due to be repaid in June this year.

The results also showed footwear retailer Vans would move into a part of the building formerly occupied by Miss Selfridge.

with PA Wires

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