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Sir Philip Green has secured a new £310m mortgage deal for his Topshop flagship store on Oxford Street in a last minute deal with US private equity firm Apollo Management International.
The deal is a relief for Green’s family firm, which owns the Arcadia Group, parent of high street brands including Miss Selfridge, Wallis and Evans, which revealed in September that difficulties in refinancing the loan could mean it would have to raise new funds to survive.
The loan, provided in 2014 by a syndicate of banks led by Royal Bank of Scotland, had been due to expire last June but was extended to December as part of a restructuring deal agreed earlier this year.
While the deal with Apollo provides a firmer footing for Green’s retail empire, the specialist lender is likely to have demanded a higher rate of interest than a high street bank. Talks are also likely to have been complicated because Green gave Arcadia’s pension funds a charge over the building as part of a £385m bailout deal with the Pensions Regulator.
Arcadia remains under pressure from poor trading as political and economic uncertainty and another relatively warm autumn has hit sales of cold-weather clothing, including coats and knitwear, across the market.
Topshop and the group’s other chains are also facing increasing competition from the likes of H&M, Asos and Boohoo while Debenhams, which is a key stockists of its brands such as Dorothy Perkins and Wallis, is in difficulty.
In September, Arcadia warned that difficult trading conditions, particularly in the event of a no-deal Brexit, might leave it without sufficient cash to deliver its three-year rescue plan.
Green’s retail empire staved off collapse in June after winning backing from creditors for a rescue plan that involves the closure of about 50 stores, 1,000 redundancies and rent cuts of up to 50%.
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