Fashion retailer Arcadia is urgently seeking £50 million in funding to address the cash flow challenges brought on by the ongoing coronavirus crisis. The company is looking to borrow against its distribution centre in Northamptonshire and has approached banks and hedge funds for the financing. With its 550-store estate closed during this period, the funding is crucial for Arcadia to navigate through the current challenges. It is reported that the company is aiming to finalize the deal as quickly as possible.
The value of the distribution hub in Northamptonshire is not as high as its flagship Topshop Oxford Circus store, which is worth hundreds of millions of pounds. However, the £50 million value of the centre highlights the growing importance of distribution centres for businesses that are increasingly trading online.
Opened last year, the Northamptonshire site plays a vital role in the logistics operations of Topshop. Arcadia plans to significantly increase its online sales through the brand’s webstore. The company has not provided any comments regarding the funding news, but a routine board meeting is scheduled to discuss the overall impact of the coronavirus on the company.
The fashion industry has been severely affected by the current pandemic, and Arcadia is particularly vulnerable due to its previous struggles and restructuring efforts. The company narrowly avoided collapse last year and has since operated under a series of company voluntary arrangements. Additionally, Arcadia may face financial challenges from department store chain Debenhams, as the retailer plans to file for administration and Arcadia operates numerous concessions in its stores. With approximately 18,000 employees, Arcadia is one of the largest privately owned employers in the UK.