Mike Ashley offers Philip Green’s embattled Arcadia emergency funding
Mike Ashley has offered emergency funding to fellow retail billionaire Sir Philip Green’s Arcadia empire, which is on the brink of bankruptcy.
After speculation that a deal was in the offing over the weekend, Ashley’s Frasers Group today confirmed that it had offered the Topshop-owner £50m in loans.
It added that should the company enter administration, Frasers would be interested in participating in any sale process.
A letter to Arcadia executives, seen by the BBC, said: “Our offer would allow you to retain employment for many thousands of your staff, reopen hundreds of stores when the current lockdown ends, and protect the financial positions of thousands of members in your pension schemes.”
Frasers said that it was awaiting a “substantive response” to its offer, which Sky News reported on Saturday.
Should Green’s retail empire, which also contains Dorothy Perkins and Burton, collapse, some 13,000 people could find themselves without a job.
Like other retailers Arcadia has been hit hard by store closures due to new lockdown restrictions in addition to shifting consumer habits.
Arcadia’s stores in Scotland, Wales and Northern Ireland are open but the bulk of its more than 500 sites remain closed due to lockdown in England.
Further restrictions are a big blow to the retail company, which has a smaller online footprint than its peers, relying on brick-and-mortar stores.
Green has furloughed more than 14,000 staff, relying on government support, while also considering a string of set sales to raise funds. In September reports suggested Green had put Burton’s former London headquarters up for sale.
Before Ashley’s offer became concrete, it was expected that the group would be forced to call in the administrators on Monday.
Should the loans not prove enough, any administration process is likely to trigger a scramble for the firm’s assets.
Its digital operations, as well as the bricks and mortar stores that it can currently open, are expected to be snapped up first by hungry creditors.