Arcadia seeks £50m funding, Topshop distribution hub to be used as security
Arcadia is reportedly racing to raise extra cash as the coronavirus crisis adds to its existing problems and creates a cash flow issue at the firm. A report has said that it’s seeking to borrow around £50 million against its distribution centre in Northamptonshire.
Sky News reported that the group has approached banks and hedge funds about the funding, which is designed to help it through this period in which its entire 550-strong store estate is closed. It also reported that the company has signalled that it wants to clinch a deal as quickly as possible.
While the value of the distribution hub is nowhere near as high as the hundreds of millions that its mortgaged Topshop Oxford Circus flagship is worth, the £50 million value highlights the importance of distribution centres as businesses increasingly trade online.
The Northamptonshire site only opened last year and is a key part of the logistics operation for Topshop with Arcadia planning to radically increase the proportion of sales it gets through that brand’s webstore.
Arcadia hasn't commented on the Sky News story and the news organisation said that a routine board meeting was planned for Thursday at which the board would be discussing the overall impact of the coronavirus on the company.
The pandemic has come at a particularly bad time for the entire industry, but for Arcadia especially as the company has already been operating under a series of company voluntary arrangements, having come close to collapse last year. It could also face a financial hit from Debenhams, which is planning to file for administration, as Arcadia operates a large number of concessions in its department stores.
Arcadia employs around 18,000 people and is therefore one of the biggest UK employers that's privately owned.
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