Sir Philip Green has secured a last-ditch £310m mortgage deal for his flagship Topshop store on Oxford Street in London with the US private equity company Apollo Management International.
The deal will be a relief to Green’s family business, which owns Arcadia Group, the parent company of high street brands including Miss Selfridge, Wallis and Evans, which had said difficulties in refinancing the loan could mean it would have to raise new funds to survive.
The loan, provided in 2014 by a syndicate of banks led by Royal Bank of Scotland, had been due to expire in June this year but was extended to December as part of a restructuring deal agreed earlier in 2019.
While the four-year agreement with Apollo provides a firmer footing for Green’s retail empire, the specialist lender is likely to have demanded a higher rate of interest than a high street bank. Talks are also likely to have been complicated because Green gave Arcadia’s pension funds a charge over the building as part of a £385m bailout deal with the Pensions Regulator.
Arcadia remains under pressure from poor trading after political and economic uncertainty and another relatively warm autumn resulted in lower sales of cold-weather clothing, including coats and knitwear, across the market.
Topshop and the group’s other chains are also facing increasing competition from the likes of H&M, Asos and Boohoo, while Debenhams, a key stockist of brands such as Dorothy Perkins and Wallis, is in difficulty.
In September, Arcadia warned difficult trading conditions, particularly in the event of a no-deal Brexit, might leave it without sufficient cash to deliver a three-year rescue plan.
Green’s retail empire staved off collapse in June after winning backing from creditors for a rescue plan that involves the closure of about 50 stores, 1,000 job losses and rent cuts of up to 50%.
