Next is reportedly weighing up a bid for Sir Philip Green’s collapsed retail empire Arcadia with US investment firm Davidson Kempner Capital Management.
The high street retailer is holding detailed discussions with Davidson Kempner about a combined offer for Arcadia, the owner of Topshop, Dorothy Perkins and Miss Selfridge, after it fell into administration last month, Sky News reported.
The companies are “likely but not certain” to launch a bid for the retail empire, the broadcaster reported, citing sources.
Davidson Kempner would reportedly provide most of the funding for the takeover and would own the majority of the Arcadia business if a deal is completed.
Retailers including Mike Ashley’s Frasers Group, Barney’s department store owner Authentic Brands and fast fashion giant Boohoo have also been reported to be interested in the sales process, which is being run by Arcadia’s administrator Deloitte.
An offer from Next is not yet certain, Sky News said, and the retailer has also been in discussions with other financing partners including private equity firm Carlyle and turnaround specialist Alteri Investors.
A source told the broadcaster that if a bid by Next and Davidson Kempner was successful, a substantial number of Topshop stores could remain open.
Arcadia collapsed into administration earlier this month, putting 13,000 high street jobs at risk, in the biggest retail failure of the coronavirus pandemic so far.
It filed for administration after talks with lenders over a potential £30m loan fell through.
Arcadia had said it had been seeking the loan to help it survive following the “material impact on trading” prompted by the pandemic.
The collapse came 18 months after Green’s empire narrowly avoided administration by securing a company voluntary arrangement that led to 1,000 job cuts and 50 store closures.
City A.M. has contacted Next for comment. Deloitte declined to comment.