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Hope for Arcadia pensioners after sale of group's assets

Lauretta Roberts
15 February 2021

Thousands of pensioners from Sir Philip Green's collapsed retail empire Arcadia have been given hope that more of their savings than previously believed have been salvaged as a result of the sale of the group's assets.

Trustees of the fund wrote to pensioners last week to tell them that sufficient funds had been raised from the sale of the group's brands to avoid the schemes relying on the pensions lifeboat, which would reduce payments.

Last week administrator Deloitte completed the sale of the Arcadia brands with the remaining brands, Dorothy Perkins, Burton and Wallis, being sold to Boohoo in a £25.2m deal. Previously ASOS had secured the prime assets of Topshop, Topman and Miss Selfridge in a £265m deal (paying an extra £65m for existing stock and stock in progress) and, before Christmas, Australia's City Chic Collective paid £23m for plus-size brand Evans.

The sale of the Topshop flagship store on Oxford Street is being handled in a separate administration process by KPMG. Any profit from the sale of the property will go to the pension fund, however the building carries a £310m loan from Apollo Global Management, which would need to be paid off first.

Arcadia's pension schemes were granted security over £210m of assets under the terms of a 2019 CVA agreement for the group.

In the letter to pensioners, first reported by The Sunday Telegraph, the trustees said that the schemes had already received an initial distribution of £173m from the company in respect of that secured, which is believe to stem in part from the sale of Topshop, Topman and Miss Selfridge to ASOS.

“As other assets are realised and recoveries are made during the administration process, the schemes will receive additional payments,” the letter continued.

Arcadia collapsed at the end of November 2020 after failing to secure additional funding to keep it afloat during the crisis. Deloitte was appointed to conduct the sale of its assets with KPMG appointed to look after the sale of 214 Oxford Street.

None of the buyers of the brands has elected to keep any of Arcadia's circa 450 stores open leading to thousands of redundancies. The group employed around 13,000 people before its collapse. So far jobs saved number in the hundreds and ASOS and Boohoo retained some head office functions such as buying, design and merchandising.

ASOS has, however, confirmed that it is investigating the possibility of securing the lease for 214 Oxford Street in partnership with a third party, but has been clear it does not want to buy the building outright.

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