Topshop to sell on Asos, digital focus key for recovery
Arcadia is rarely out of the news at the moment and Friday brought two major developments. We had news that the flagship Topshop and Topman brands are to be retailed through Asos as part of Acadia’s renewed digital focus, and also that the Pensions Regulator is seeking an extra £50 million cash injection into the Arcadia pension fund.
First of all, that Asos deal. It hasn't been confirmed by either of the companies but Arcadia CEO Ian Grabiner reportedly shared details of recovery initiatives in an email to staff this week, according to the Daily Mail.
The shift to a much stronger digital proposition will see an investment of around £60 million and will include a same-day VIP delivery service, as well as that Asos partnership.
But analysts said that the company needs to tread carefully as it deepens its investment in online. Sofie Willmott, Senior Retail Analyst at GlobalData, said: “Moving to where shoppers are makes sense for Topshop/Topman whose sister brands, Miss Selfridge and Burton, already sell on the site, with products available in abundance. However, ranges must be edited to ensure consumers still have a reason to visit the individual brands’ websites. Topshop/Topman need to launch with strong ranges to protect their brand identities and longevity, but also to compete with the plethora of other fashion players that sell on Asos.”
As well as the digital deal, the recovery plan also includes another £75 million being invested into the business by Sir Philip Green to refurbish the company’s shops, which should go some way to appeasing unhappy landlords.
But there was no hint of the company going any further to appease another major body that it needs to get on-side in order to push its CVA through. Sky News reported that the Pensions Regulator has told Green and his advisors it wants another £50 million contributed to the pension fund on top of the £100 million already offered.
The offer currently on the table also includes around £185 million of security in the form of property assets, and an annual payment of £25 million for the next three years, which is half of what the company pays at the moment.
That would add up to a £360 million aggregate pension funding package, but the regulator is seeking £410 million.
The pensions watchdog said it would withhold its support for the company’s CVA proposals unless it gets the money it wants. Urgent talks are continuing on the subject.
The crucial vote happens next Wednesday and if the CVA proposals don't get through, the business, which employs around 18,000 people, could fall into administration with news reports saying this could happen as fast as Wednesday evening. That would most likely mean to a break-up of the group.
Copyright © 2021 FashionNetwork.com All rights reserved.