A last minute deal for a multimillion-pound loan to Sir Philip Green’s struggling Arcadia Group is said to have fallen through.
The retail group – which includes the Topshop, Dorothy Perkins. Topman, Miss Selfridge and Burton brands – has been revealed to be on the brink of collapse, with 15,000 jobs at risk.
Mike Ashley’s Frasers Group confirmed it has offered a £50m loan in moves to stave off collapse into administration, but senior sources at the company told the BBC they do not expect a last-minute rescue deal.
That means Arcadia Group will enter administration at some point today, the broadcaster said, with Deloitte to be appointed as administrators.
Frasers Group, which runs Sports Direct and House of Fraser among others, stated: “The company can confirm that it has made an offer and provided draft terms to the Arcadia Group for a loan of up to £50 million and is now awaiting a substantive response.
“Should the company and the Arcadia Group’s efforts to agree an emergency funding package fail and the Arcadia Group enter into administration, the company would be interested in participating in any sale process.”
Arcadia had been in emergency talks with lenders to secure a £30 million loan.
If the insolvency is confirmed, it is expected to trigger a scramble among creditors to get control of company assets.
The firm employs around 15,000 people in more than 500 stores across the UK.
It is the latest retailer to have been hit by the closure of stores in the face of coronavirus, with rivals including Debenhams, Edinburgh Woollen Mill Group and Oasis Warehouse all becoming insolvent since the pandemic struck in March.
Earlier this year, Arcadia revealed plans to cut around 500 of its 2,500 head office jobs amid a restructure caused in part by the pandemic.