Frasers Group has confirmed that it has offered Arcadia Group a rescue loan of up to £50m, amid news that Sir Philip Green’s empire is on the brink of collapse.
The retail group may reportedly decline the offer, however, as a senior Arcadia Group source told the BBC: “If this was about £50m we could find that in five minutes.
“This is obviously a sad day, we tried to save it a year ago when £200m was put into the business and the pension fund, but it’s impossible to operate now. You don’t know when you’ll be open, you don’t know what stock to buy.”
An insider told Sky that the move was “inevitable” following failed talks with a group of potential lenders over a £30m rescue package.
Frasers Group, however, said it would be “interested in participating in any sale process” concerning the group if discussions over its potential emergency funding fail.
In a statement, Frasers Group also said it notes “recent press reports concerning the potential provision of emergency funding by the company to the Arcadia Group”.
The group added: “The company can confirm that it has made an offer and provided draft terms to the Arcadia Group for a loan of up to £50m and is now awaiting a substantive response.
“Should the company and the Arcadia Group’s efforts to agree an emergency funding package fail and the Arcadia Group enter into administration, the company would be interested in participating in any sale process.”
Arcadia currently operates over 500 sites, the majority of which are closed due to government restrictions. It currently employs around 15,000 people, having already announced 500 head office job cuts earlier this year.
Green bought the group in 2002 for a sum of £850m, later paying a £1.2bn dividend to Arcadia’s registered owner and his wife, Lady Christina.
A CVA was narrowly agreed for the group last year, forcing Green to pledge a packet of assets worth £400m to the company’s pension scheme.
A spokesperson for Arcadia told Retail Sector: “We are aware of the recent media speculation surrounding the future of Arcadia. The forced closure of our stores for sustained periods as a result of the COVID-19 pandemic has had a material impact on trading across our businesses.
“As a result, the Arcadia boards have been working on a number of contingency options to secure the future of the Group’s brands. The brands continue to trade and our stores will be opening again in England and ROI as soon as the Government COVID-19 restrictions are lifted next week.”