Arcadia Group inches closer to collapse after Mike Ashley’s £50m loan falls though

Mike Ashley's £50m rescue deal for Arcadia Group falls through
Mike Ashley (left), who runs Frasers Group, and Sir Philip Green (right) who runs Arcadia Group.
// A £50m emergency loan to Sir Philip Green’s embattled Arcadia Group falls through
// The loan had been offered by Mike Ashley’s Frasers Group over the weekend
// It’s thought that Arcadia Group could enter administration today

Mike Ashley’s plans for an emergency £50 million loan to Sir Philip Green’s struggling Arcadia Group have reportedly fallen through.

Green’s retail empire, which includes the Topshop, Dorothy Perkins and Burton brands, was recently revealed to be on the brink of collapse with around 15,000 jobs at risk.

Senior sources at the company have told BBC News that they do not expect a last-minute rescue deal, which had been flagged by Ashley’s Frasers Group over the weekend.


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Arcadia Group is expected to fall into administration today, the BBC said, with Deloitte to be appointed as administrators in the coming days.

The offer from Frasers Group, which runs Sports Direct, House of Fraser and Jack Wills among others, amounts to a £50 million loan, Ashley’s company confirmed.

“The company can confirm that it has made an offer and provided draft terms to the Arcadia Group for a loan of up to £50 million and is now awaiting a substantive response,” Frasers Group said.

“Should the Company and the Arcadia Group’s efforts to agree an emergency funding package fail and the Arcadia Group enter into administration, the company would be interested in participating in any sale process.”

Sky News quoted Frasers Group chief financial officer Chris Wootton as saying: “We hope that Sir Philip Green and the Arcadia Group will contact us today to discuss how we can support them and help save as many jobs as possible.”

Arcadia Group had been in emergency talks with lenders in a bid to secure a £30 million loan to help shore up its finances.

If the administration is confirmed, it is expected to trigger a scramble among creditors to get control of company assets.

Arcadia Group’s pension scheme is likely to have the biggest claim on proceeds generated by Deloitte.

It is the latest retailer to have been hammered by the closure of stores in the face of coronavirus, with rivals including Debenhams and Edinburgh Woollen Mill Group all sliding into insolvency since the pandemic struck in March.

There is a chance Arcadia Group’s stable of fashion retailers could become online-only, in the same vein as Oasis & Warehouse after it went into administration and was bought out by Boohoo Group.

Arcadia Group has more than 500 retail stores across the UK with the majority of these currently shut as a result of England’s four-week lockdown, which will end mid this week.

Earlier this year, Arcadia Group revealed plans to cut around 500 of its 2500 head office jobs amid a restructure in the face of the coronavirus crisis.

Meanwhile in September the former London headquarter for Burton was put up for sale in a bid to seek fresh funds for the company.

In addition, last year Arcadia Group launched a CVA which saw it close down several stores – including Topshop sites the US.

However, Green was only able to secure that CVA after he pledged a package of assets worth more than £400 million to Arcadia Group’s pension scheme.

Speculation of another restructure at Green’s retail empire has been circulating for months.

with PA Wires

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3 COMMENTS

  1. How fortunate for Philip Green to have a wife who’s a non-British citizen and who lives in a so called Tax free haven, and to whom £millions were paid in dividends. It is also unfortunate that the UK administrators cannot go after the assets held by wife. Poor old Philip Green, even though he has plenty, wouldn’t go begging to his wife for her to give up some of the assets in order to compensate the staff of Arcadia. For years he paid huge dividends to his wife instead of reforming and investing profits in his company. With all his entrepreneurial skills – the so-called “king of retail”, has no plans to save Arcadia. Philip Green answer me one question – “Where will all the money and assets go when you and your wife are no longer in the land of the living? To your wasteful children, eh? Please redeem yourself and do some good with your money. You can still live well with a lot less.

  2. Phil Green should think of the poor people that are going to be out of work if Arcadia goes under, I think he and his wife between them could put forward a good financial package that would save all of the companies that are a high street name , has he and wife thought of adding online services to enable the stores to remain on our streets.get your hand in your pocket and save departments and jobs for everyone who are working for you. You can’t take it with you Phil and Wife use it wisely and pay up the pensions too. Good luck.

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