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Procurement

Philip Green’s Arcadia agrees crucial debt refinancing

Philip Green’s efforts to rejuvenate his ailing fashion empire have received a boost from private equity group Apollo Management, which is refinancing a key loan for Topshop and Miss Selfridge owner Arcadia.

Arcadia, whose brands also include Wallis and Burton, said it had agreed a £310m, four-year loan with US-based Apollo. The loan is secured against the freehold of the Oxford Street property, which houses the flagship Topshop and Topman store and a Niketown outlet. The deal comes after Arcadia warned in its annual accounts that any failure to refinance the loan, which fell due at the end of December, would pose a material risk to its viability.

Real estate agents have estimated that the building is worth more than £400m.

The terms of the new facility were not disclosed, but bankers said they were likely to be fairly onerous given the still delicate financial condition of Arcadia, which is legally controlled by Sir Philip’s wife Tina.

Royal Bank of Scotland was the lead lender on the existing facility.

Refinancing the secured loan allows Arcadia to concentrate on a pivotal trading period. Conditions on the UK’s high streets remain highly competitive and characterised by high levels of discounting. Arcadia brands such as Topshop and Wallis were offering 25 per cent off entire ranges over the recent Black Friday week.

After protracted negotiations with landlords, Sir Philip managed to win creditor approval for a company voluntary arrangement this year. It will reduce rents on hundreds of the group’s shops. Many are likely to close in the medium term as leases come to an end, although comparatively few will shut as a direct result of the CVA.

Arcadia is investing in new digital capability — it has opened an automated warehouse in the Midlands, and introduced an unlimited home delivery service similar to Asos Premier. But like many peers, the group must contend with the restricted availability of trade credit insurance, and has experienced some turnover at the top of the business.

Paul Price, the former Burberry executive who now heads Topshop and Topman, is leaving shortly to return to the US, while creative director Anthony Cassidy will depart in early 2020 to join Marks and Spencer.

The company has made several senior hires in digital roles, however, and appointed Andrew Coppel, the former chief executive of hotels group De Vere, as chairman in November. He will also chair Taveta Investments, the holding company controlled by Tina Green.

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