Creditors of Topshop and Topman, the flagship brands in the former Arcadia fashion empire, have been hit to the tune of £176m, according to the most recent analysis; this is more than twice as much as previously thought.
Last month it was revealed that Arcadia had collapsed with debts of around £750m in total with creditors to Topshop and Topman owed £82.2m. At the time administrator Deloitte said it was still making calculations and that the figure could rise.
Now, the Daily Telegraph, has reported the latest calculations which show the new figure of £176m with overseas factories and property companies the hardest hit.
One of the lesser creditors is supermodel Kate Moss’s creative agency, which is owed £1,000. Moss is a friend of former Arcadia owner Sir Philip Green and was often seen with the retail mogul at parties. She designed a collection for Topshop in the late 00s.
The Topshop, Topman and Miss Selfridge brands were sold to ASOS in a £265m deal (ASOS also paid a further £65m for existing and in progress stock) but the deal did not include any of the brands’ physical retail stores. ASOS is however investigating the possibility of securing the lease on the Topshop flagship on Oxford Street, but it does not wish to buy the building outright.
314 Oxford Street is being sold in a separate administration process by KPMG and any profits from the sale are set to go towards plugging the hole in the Arcadia pension fund. Arcadia took out a loan against the building of £310m with Apollo Global Management, which will need to be paid back first meaning there could be little profit in the transaction.
However Arcadia pensioners have been given hope that more of their savings have been saved than had been expected.
Following the sale of all of the Arcadia brands (Boohoo has acquired Dorothy Perkins, Burton and Wallis for £25.2m while City Chic Collective acquired Evans for £23m), the pension schemes had already received an initial distribution of £173m from the company. As part of Arcadia’s 2019 CVA deal pension schemes were granted security over £210m of assets.
It is hoped that the pension schemes will not have to rely on the official pensions lifeboat which would reduce payments. The pensions black hole is estimated to be between £250m and £350m.
In the meantime Sir Philip Green’s family is set to receive £50m from the sale of the brands relating to an interest-free loan made to the company two years ago. This will be made ahead of any monies distributed to secured creditors.
Arcadia collapsed at the end of November 2020 having failed to secure emergency funding to keep the business afloat during the pandemic.
Its demise promoted Debenhams, where Arcadia had been its largest concessionaire, to enter liquidation, having already been in administration for a number of months. The Debenhams brand and website was subsequently acquired by Boohoo and all 118 stores are now to be closed.