Next plots dramatic Topshop rescue with US investor

Bosses at Next will spend the weekend thrashing out a deal to rescue Sir Philip Green’s Arcadia empire.

Next is in talks with US asset management giant Davidson Kempner Capital Management about joining forces and financing a bid for the home of Topshop, Topman, Burton and Miss Selfridge.

Arcadia dramatically collapsed into administration last month and up to 13,000 jobs are at risk.

Fashion swoop: Next is in talks with US asset management giant Davidson Kempner Capital Management about joining forces and financing a bid for Sir Philip Green's Arcadia empire

Fashion swoop: Next is in talks with US asset management giant Davidson Kempner Capital Management about joining forces and financing a bid for Sir Philip Green's Arcadia empire

Fashion swoop: Next is in talks with US asset management giant Davidson Kempner Capital Management about joining forces and financing a bid for Sir Philip Green’s Arcadia empire

Next, run by Simon Wolfson for nearly 20 years, has just two days to thrash out funding for the deal as bids have to be in by Monday.

It is not yet clear if Next and Davidson will come to an arrangement and insiders say the retailer is also in talks with finance houses Alteri and Carlyle.

Next has no history of transformational deal making and Wolfson wants to bring in Davidson Kempner to take advantage of the firm’s acquisition skills.

It is understood that Davidson would provide the majority of the financing for a takeover.

The Arcadia sales process is being run by Deloitte.

Other potential bidders include online fashion retailer Boohoo, Mike Ashley’s Frasers Group, Authentic Brands – the US owner of department store Barneys – and Shein, a Chinese fast-fashion giant.

But Next is believed to be a potential frontrunner for Green’s empire as it wants to take over the whole of Arcadia, rather than just cherry pick the best assets.

Next’s last significant acquisition was the Grattan catalogue business in 1986, which formed the basis of Next Directory.

The chain has been a rare retail success story during lockdown and sources close to Wolfson say he feels now could be the right time to snap up some top brands on the cheap.

Simon Wolfson

Simon Wolfson

Sir Philip Green

Sir Philip Green

Next in line: Simon Wolfson (left), who has run Next for 20 years has his eye on Sir Philip Green’s (right) brands

Richard Hyman, retail analyst, said: ‘Wolfson is not a deal maker at heart but he senses this is a period of opportunity.

‘Topshop could do well under Wolfson with some investment and cough up better investments than it has done.’

Documents circulated to potential bidders by administrators Deloitte show that Arcadia revenues came in at £829million for the year to September 2019, compared with £846million the year before. 

Davidson would make a strong partner and has a history rescuing distressed UK assets.

In July it lent Sir Richard Branson’s Virgin Atlantic £170million as part of a rescue deal.

It also acquired the Oak Furnitureland chain through a pre-pack administration over the summer.

If Wolfson did secure the Arcadia assets, it would represent a radical shake-up of the High Street.

Green bought the Arcadia group in 2002 for £850million. But his swashbuckling reputation was undone in 2015 when he sold department chain BHS for £1 to Dominic Chappell, a former bankrupt who was last month sentenced to six years in prison for tax evasion.

BHS collapsed just a year after that deal, sparking a bitter row about Sir Philip’s responsibilities towards its pensioners.

Question marks still remain over Arcadia’s pension deficit, which is estimated to have a black hole of £350million.

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