Up to 40 potential bidders in queue for Arcadia's brands

By

Sandra Halliday

Published
Dec 14, 2020

Much of the attention around potential bidders for Arcadia's brands has been focused on big names such as Boohoo, Frasers Group, and now Authentic Brands Group too. But reports suggest that as many as 40 parties have registered interest in the auction that's being overseen by Deloitte.

Major UK names River Island and Primark are also reported by The Times to have expressed an interest, and the large crowd of potential buyers suggests that at least some of the brands could have a strong future ahead of them.

As well as the stars of the portfolio – Topshop and Topman – the auction also includes Dorothy Perkins, Wallis, Burton, Miss Selfridge, Evans and Outfit. It's unclear how many companies have expressed an interest in the last three. News at the weekend suggested that while fixed costs such as rent are an issue for all of the brands, those three are all loss-making even before fixed costs are taken into account.

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Between them, the entire portfolio of brands had revenues of £1.8 billion a year ago and an estimated sale value of £800 million, although their combined sale value today has been estimated by Brand Finance at around £400 million.

The prospect of the brands changing hands for the first time in two decades certainly means that 2021 will be an interesting year for many of Britain's high street names, even aside from everything else that's going on in retail at present.

So do we know yet who’s bidding? No news has been released and few of the names being linked to the auction have spoken publicly. Bidders are said to include Marks & Spencer and Next, and we know that the latter company has shown itself likely to be in a very acquisition and expansion-focused phase at present. 

But there have also been suggestions that some of the 40 interested parties are rivals who are more keen to look at Arcadia's books than to buy its brands. An analyst told The Times newspaper that the real test of interest will be when actual bids are placed at some point this week.

Of course, not all of the bids are likely to come from other retailers with the newspaper also suggesting investment firms Opcapita, Fortress, Apollo and Elliott Management as possible suitors.

Only two of the potential buyers are believed to be interested in both Arcadia and the other big name that’s in play at present — Debenhams. Mike Ashley’s Frasers Group is known to be pursuing Debenhams and Authentic Brands is believed to be in talks too. But the former is reported to be close to a deal for the business, although there’s reportedly still haggling going on over how many of the stores it would take on. There have been suggestions of between 30 and 40 out of the retailer’s 124 total.