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Primark owner in the running to acquire Arcadia brands

Lauretta Roberts
13 December 2020

Primark owner Associated British Foods is reported to be among those in the mix to acquire all or some of the brands from Sir Philip Green's collapsed retail empire, Arcadia.

Arcadia, which owns Topshop, Topman, Burton, Evans, Dorothy Perkins, Wallis and Miss Selfridge, was placed into administration earlier this month after talks to secure emergency funding failed.

Its administration prompted Debenhams, which was already in administration and which is home to numerous Arcadia concessions, to begin liquidation proceedings.

Interest in the Arcadia brands, in particular its prize assets Topshop, is understood to have been high, with names in the frame including online group Boohoo (widely seen as favourite to land Topshop), Next, Marks & Spencer, River Island and now Primark owner ABF, according the Sunday Times.

ASOS's name has been cited in connection with Topshop but its interest has not been confirmed and Tesco has been floated as a possible buyer for Dorothy Perkins, since it houses a number of its concessions.

Also in the running is Mike Ashley's Frasers Group, which has formally declared its interest but at present has its hands full with negotiations with Debenhams liquidator Hilco over the purchase of some Debenhams stores and stock. A decision on that deal is said to be imminent.

Last week it was reported that administrators for Arcadia, Deloitte, had put a £200m price tag on Topshop and are keen to secure as high a price as possible for that brand to ensure the maximum value for creditors. It is hoping for a deal before Christmas.

Should Primark land any or all of the Arcadia brands, they would bring with them e-commerce businesses, which may provide a platform for taking the Primark brand online in some capacity.

Primark has famously resisted moving into e-commerce with analysts saying that its model, based around very low prices, would be challenged by introducing online retail, which operates as very low margins.

Despite COVID-19 lockdowns forcing Primark to close its stores and lose its ability to trade altogether at certain points during this year, the business, which is backed by the billionaire Weston family, has said it is in no rush to introduce e-commerce. Its stores have proved to be among the most popular with shoppers when stores have been permitted to open and are currently operating with extended hours until Christmas.

Sir Philip Green is understood to be keen to see Topshop go to Manchester-based online group Boohoo, which has already picked up the Oasis and Warehouse brands after they collapsed at the start of the first COVID-19 lockdown.

However if Boohoo were successful it would likely mean the end of Topshop as a high street brand as it is highly unlikely to want any of its stores. In addition, Deloitte is duty bound to act in the interests of creditors so will be seeking the best possible price and outcome for them from any deal.

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