// Sir Philip Green’s family is likely to receive £50m from the sale of Topshop
// Over 1000 suppliers to the chain are set to receive less than 1% of money owed to them
// A total of 706 unsecured creditors to the 6 other chains in Arcadia Group are owed at least £33m
Sir Philip Green’s family is reportedly expected to receive £50 million from the sale of Topshop as the sales process continues.
More than 1000 suppliers to the fashion chain are set to receive less than one per cent of the money owed to them.
Both Topshop and Topman owe 1155 unsecured creditors, including suppliers and landlords, at least £51 million, The Guardian reported.
READ MORE:
- Arcadia collapsed under debts of £750m, Deloitte says
- Boohoo in talks to buy Burton, Wallis & Dorothy Perkins from Arcadia administrators
This figure does not include monies owed to HMRC.
Administrators at Deloitte said the final debts for Topshop were likely to be “materially higher” once tax and money potentially owed to the group’s pension fund are included.
Unsecured creditors owed more than £1 million include Daventry district council, for Topshop’s new distribution centre in the area, shopping centres including Liverpool One and Stratford City, and a number of clothing suppliers, including several in the UK and Turkey.
At least 706 unsecured creditors to the six other chains in Arcadia Group, which include Dorothy Perkins, Burton, Wallis, Outfit and Evans, are also owed at least £33 million.
These creditors are expected to receive at least some payout except those to Outfit, who are owed £252,000.
All the chains’ debts are also likely to be far higher than the initial estimate which does not include money owed to HMRC.
As secured creditors, the Green family’s Aldsworth Equity, which is owed £50 million relating to an interest-free loan it made to the group in 2019 at the time of an emergency restructure, will be paid before any funds are distributed to suppliers, landlords and HMRC.
However, the amount paid to secured creditors is dependant on the amount Topshop is sold for.
Arcadia Group fell into administration at the tail-end of last year due to the impact of the Covid-19 pandemic, years of under-investment and a failure to keep up with shifts to online shopping.
At the time of its collapse, it employed around 13,000 people and had 444 UK stores.
New documents prepared for Arcadia Group administrators Deloitte revealed on Wednesday that Topshop and Topman have failed with gross liabilities of more than £550 million.
The retail empire fell into administration under the weight of debts totalling £750 million.
Online fashion retailer Asos is currently in talks about buying Topshop, Topman and Miss Selfridge with the deal expected to total more than £300 million.
Topshop’s parent company, another secured creditor, is set to receive £327.6 million of the proceeds with up to £210 million of that cash potentially set aside to pay down Arcadia’s pension deficit, which is estimated to be as much as £300 million.
Meanwhile, proceeds from the sale of Topshop’s London flagship store are also earmarked for the pension scheme.
Online fashion giant Boohoo, which recently bought the Debenhams brand in a £55 million deal, said on Friday that it is in exclusive talks to buy Dorothy Perkins, Wallis and Burton brands from Arcadia Group.
A deal could see Boohoo buy the three, excluding the HIIT brand sold at Burton, although the board stressed that so far these are only discussions and that no deal is guaranteed.
Boohoo has also previously bought a number of other well-known high street brands out of administration, turning them into online-only operations, including Oasis, Warehouse, Coast and Karen Millen.
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