Philip Green’s Arcadia collapse to push Debenhams to the brink
The imminent collapse of retail group Arcadia will push Debenhams to the brink of liquidation, as potential buyer JD Sports considers backing out of the deal.
JD’s board was supposed to decide whether to go through with the Debenhams acquisition by the end of last week, but has had second thoughts after learning that Arcadia is set to appoint administrators as early as this weekend, The Sunday Times reported.
JD Sports entered exclusive talks with Debenhams last week. JD Sports is said to be interested in Debenhams because its website is still one of the most popular shopping destinations, and such a move would allow the sports retailer to snap up cheap space on the high street.
According to The Sunday Times, if JD drops out of the race for Debenhams, the only potential buyer for the business would be House of Fraser owner Mike Ashley.
Ashley was “frozen out” of Debenhams sales talks last month, which he was said the be “furious” about – the mogul previously owned 30 per cent of Debenhams and lost £150m when the chain was taken over by its lenders last year.
Arcadia, which owns Topshop, Dorothy Perkins and Burton, could appoint administrators as soon as tomorrow. The firm’s administration could put 13,000 jobs at risk.
In a statement last week Arcadia said: “We are aware of the recent media speculation surrounding the future of Arcadia. The forced closure of our stores for sustained periods as a result of the COVID-19 pandemic has had a material impact on trading across our businesses.
“As a result, the Arcadia boards have been working on a number of contingency options to secure the future of the Group’s brands. The brands continue to trade and our stores will be opening again in England and ROI as soon as the government Covid-19 restrictions are lifted next week.”
JD Sports and Debenhams have been contacted for comment.