// Next is being seen as the frontrunner to buy Sir Philip Green’s embattled Arcadia Group
// Should their bid be successful, they’d appoint external managers to a new joint venture that would run Arcadia
// Next would manage Arcadia’s online operations through its Total Platform
Next has reportedly emerged as the leading bidder in the race to acquire the Arcadia Group retail empire out of administration as the auction process heads to a conclusion.
According to The Sunday Times, Next is being seen as the frontrunner to buy Sir Philip Green’s embattled firm and has made a bid for it in partnership with US hedge fund Davidson Kempner.
While full details on its bid remains unclear, The Times reported that Next and Davidson Kempner have conducted extensive due diligence on Green’s empire, which includes Topshop, Dorothy Perkins, Burton, Miss Selfridge and Wallis.
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Should their bid be successful, they would appoint external managers to a new joint venture that would run Arcadia.
The new joint venture would see Next taking a minority stake, although it would manage Arcadia’s online operations through its Total Platform, a service where Next operates third-party brands.
On the other hand, Arcadia’s stores would stay open if landlords agreed to change rental agreements to one that was turnover-based.
Next and Davidson Kempner face stiff competition from Authentic Brands – the owner of Forever 21 and New York department store Barneys – which is reportedly making a joint bid for Topshop with JD Sports.
While JD Sports itself has not made an offer for any of Green’s former assets across Arcadia, US-based Authentic Brands is reportedly in early-stage discussions with the British sportswear giant about becoming operating partner should its bid for Topshop be successful.
Final offers for Arcadia are due on Monday, with retail stalwarts including Boohoo Group and Mike Ashley’s Frasers Group thought to be among the bidders.
It has been widely speculated that Boohoo’s bid would not include Arcadia’s store estate, just as it had done with Karen Millen and Oasis & Warehouse recently.
Nonethrless, bids are expected to be worth over £200 million and administrators from Deloitte are hoping to secure deals by the end of this month in order to save Arcadia from winding down completely.
So far only one Arcadia fascia has been rescued, Evans, which was sold to Australian firm City Chic for £23 million – although Evans’ stores were not part of the deal.
When Arcadia fell into administration at the end of November, it placed hundreds of stores and up to 13,000 jobs at risk.
It has been reportedly estimated that Arcadia’s pension fund has a £350 million deficit and Green is facing renewed pressure to plug it with his own money, just as he did so with the BHS pension deficit after it collapsed in 2016.
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