Sir Philip Green’s Arcadia, which employs around 13,000 people, is understood to be preparing to appoint administrators from Deloitte as soon as today, after talks with lenders about a £30 million loan ended without success.
This morning retail tycoon Ashley’s Frasers Group, which also owns JD Sports – Peacocks and Sports Direct have branches in Dumbarton’s Artizan Centre – said it has offered Arcadia Group a loan of up to £50 million, and was “awaiting a substantive response”.
Frasers, which is behind Sports Direct, has now said that Arcadia has declined the offer of a ‘lifeline’ loan of up to £50 million.
Green’s retail empire could collapse within hours, as a senior source at Arcadia Group told the BBC they do not expect any last-minute rescue deal.
Mike Ashley’s Frasers Group has, however, offered a £50m loan to Arcadia to try to help the group with its cash-flow problems in the short-term.
“Our offer would allow you to retain employment for many thousands of your staff, reopen hundreds of stores when the current lockdown ends, and protect the financial positions of thousands of members in your pension schemes,” a letter addressed to Arcadia Group executives seen by the BBC says.
The letter also says that the Frasers Group would consider giving out the emergency cash on an unsecured basis – meaning Arcadia would not need to put up collateral, such as property, to guarantee it would be paid back.
“We would urge you to carefully consider this offer,” it says.
But the Arcadia Group insider told the BBC’s business editor Simon Jack: “If this was about £50m we could find that in five minutes.”
The source added: “This is obviously a sad day, we tried to save it a year ago when £200m was put into the business and the pension fund, but it’s impossible to operate now.
“You don’t know when you’ll be open, you don’t know what stock to buy.”
Arcadia’s brands once dominated High Street fashion, but its chains have been hit hard by store closures caused by the coronavirus pandemic, and the strength of online clothing retailers such as Boohoo and Asos.
Looks like another slew of folks are going to get a pension hair cut.
Funny old world when repeatedly the directors of failed businesses walk away with huge sums whilst the poor pensioners take the hit through pension underfunding.
But you know what, it’s happened so often now, one suspects the ordinary citizen-voter doesn’t really care. Apathy and the election of a Tory government – what can you say?