Arcadia, the retail group that owns popular brands such as Topshop and Dorothy Perkins, is currently in urgent talks to secure £30 million in funding to survive the current lockdown in England. The company’s pre-Christmas trading plan has been significantly affected by the closure of its stores due to the lockdown measures. In response, Arcadia has approached multiple potential lenders for the funds, and it is anticipated that an agreement will be reached soon.

Contrary to reports in the Sunday Times, Arcadia has denied considering placing the business into “trading administration”. This option would involve the current management running the business while seeking buyers for its brands. A spokesperson for Arcadia clarified that these reports are false, and the company is taking necessary measures to protect its stakeholders from the adverse impact of the lockdown. While stores in Wales, Scotland, and Northern Ireland have reopened, the majority of Arcadia’s shops in England will remain closed until December 2. However, the company continues to operate online through its own channels and partnerships.

The urgency for funding arises from concerns about Arcadia’s ability to withstand the ongoing pandemic without additional support. Last year, the company narrowly avoided collapse after implementing company voluntary arrangements, which were met with limited support. Since then, Arcadia has closed several stores and made around 500 job cuts at its head office. Presently, it employs approximately 15,000 individuals.

The discussions surrounding funding involve the pensions regulator due to the deficit situation with Arcadia’s pension fund. Before the company voluntary arrangements, Arcadia secured support from pension stakeholders by offering assets worth £400 million to bolster the fund. Additionally, Arcadia’s involvement with Debenhams complicates the situation further, as it operates numerous concessions within the department store chain. Debenhams itself is up for sale and could face liquidation if no buyer is found.

The outcome of the ongoing funding negotiations will be pivotal for Arcadia and its portfolio of brands. As the pandemic continues to disrupt the retail sector, securing the necessary funds is crucial for the survival of the company. Stakeholders, employees, and customers are closely monitoring the situation to see how it develops in the coming days.

Useful links:
BBC: Arcadia seeks new cash to save business
The Guardian: Arcadia on brink as it seeks bargain basement price in fire sale