Celebrity street mogul Sir Philip Green this weekend is trying to secure tens of millions of pounds in new funding to keep his TopShop empire afloat.
Sky News has learned that Arcadia Group has reached out to several potential lenders about borrowing close to £ 30m in support of the business after seeing its trading plans before Christmas shattered by the second English shutdown.
It is understood that talks with a number of parties are continuing, and a source close to one of the parties contacted said they believed at the end of this week that an agreement to secure the funds may be soon.
Without further financial support, it will raise renewed doubts about whether Sir Philip’s empire can survive the coronavirus pandemic.
Arcadia employs about 15,000 people, after it announced a cut of 500 head office jobs earlier this year.
The pension regulator and lifeboat are believed to be closely involved in talks about the new funding.
Like many other retailers, Arcadia – which also owns Burton and Dorothy Perkins – has seen its balance sheet torn to pieces by the impact of the pandemic.
The company’s stores in Scotland, Wales and Northern Ireland are open, but the bulk of its more than 500 locations are currently closed due to a month-long shutdown in England.
The Sunday Times reported in September that Sir Philip had offered the former Burton headquarters in central London for sale for £ 80 million.
Since the start of the pandemic, Arcadia has stopped payments to the pension system every month, but have since resumed.
The billionaire also considered a series of asset sales to raise money.
He has also fired more than 14,000 employees, relying on the government to pay the bulk of their salaries, like many other retailers.
Arcadia came close to collapse nearly 18 months ago, when it narrowly secured creditors’ approval for a voluntary arrangement for the company aimed at restructuring its finances.
As part of the deal, pension stakeholders provided their support in exchange for a comprehensive asset package valued at more than £ 400 million, which included some contributions over three years.
Some of that funding might be in jeopardy if Arcadia falls into management.
The fate of Arcadia is also partly tied to that of Debenhams, the department store chain where many Sir Philip franchise outlets are located.
The liquidation process at Debenhams will likely begin soon if no agreement is reached on the sale of the company.
Like its competitors, Arcadia’s brands have been affected by changing habits among shoppers and increased consumer caution.
It was a tumultuous period for Sir Philip, who was honored for years as the King of Main Street, but his reputation failed to recover after the BHS crash in 2016.
His sale to the supermarket chain a year ago to Dominic Chappelle, a former bankrupt who was recently imprisoned on charges of tax evasion, culminated in Sir Philip having to contribute more than £ 360 million to finance his pension deficit.
The businessman’s miserable period was not limited to the performance of his business interests.
He also got into a storm for his behavior towards Arcadia employees and his use of nondisclosure agreements to prevent former workers from discussing severance packages.
Arcadia declined to comment on Saturday.