Arcadia’s brands have suffered a significant decline in value, losing more than half of their estimated worth within a span of less than a year. In January, the combined value of the brands was estimated to be around £800 million. However, following the collapse of the business and its subsequent entry into administration, the value has plummeted. The administrators are now actively searching for potential buyers for the different assets owned by Arcadia.

According to Brand Finance, Topshop accounted for over £400 million of the £800 million valuation in January and continues to be the most valuable brand within the group, despite the reduced value. Richard Haigh, Managing Director of Brand Finance, explained that a significant portion of the brand’s value has likely been eroded due to the collapse. Nonetheless, the administration of Arcadia presents a great opportunity for strategic acquisitions. Haigh also mentioned that Deloitte, the administrators, face the challenging task of extracting value from the impressive portfolio of brands.

Among the Arcadia brands, Topshop is particularly viewed as the most desirable. Brand Finance’s Global Brand Equity Monitor survey revealed that 93% of UK consumers are aware of Topshop, with 60% being familiar with the brand. Moreover, 73% of those familiar with the brand would consider making a purchase, indicating that Topshop still holds appeal. Haigh acknowledged that Topshop’s reputation has been tarnished in recent years, partly due to the scandals involving its owner Philip Green. However, under new ownership, there is potential for Topshop and its associated menswear brand Topman to bounce back and shed any negative associations.

Despite the desirability of Topshop, Haigh revealed to the Telegraph that the Arcadia brands as a whole are expected to be sold for less than half of their previous valuation of £800 million. The collapse of the business and the urgency to sell assets during administration typically leads to a decrease in price. Additionally, it is believed that the COVID-19 pandemic has further contributed to the decline in the brands’ value.

There are several potential buyers interested in acquiring the Arcadia brands, with Boohoo and Mike Ashley’s Frasers Group being among them. If Boohoo were to acquire the brands, it is speculated that they may choose to close down all physical stores. On the other hand, Deloitte, the administrators, would prefer buyers who are willing to continue operating at least some of the stores. Mike Ashley, known for his commitment to brick-and-mortar stores, already possesses sufficient retail space, making it more likely for him to integrate the acquired brands into his existing operations.

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