Topshop flagship store's loan deadline looms
The Sunday Times reported that his retail group Arcadia is in talks with specialist lenders about the £310 million that the company borrowed from a syndicate of banks in 2014. It was actually due to expire last summer but had been extended as part of Arcadia’s company voluntary arrangement process.
There are complications though and it’s far from a case of simply renegotiating a loan. As part of a deal with the UK’s Pensions Regulator linked to Arcadia’s CVAs, its pension fund has a charge over the building. And the newspaper said that specialist lenders such as private equity company Apollo, which is reportedly part of the talks, would be likely to charge a higher interest rate than the banks have done.
Yet the value of the property, which also features Oxford Circus destination store Niketown, is very high. It’s believed to be worth around £400 million and it’s in the prime position on Europe’s busiest shopping street. Analysts told the newspaper that the desirability of the property and how easily it could be sold if it came to it both mean that demands for high interest rates are likely to be kept under control.
Regardless of the interest rate eventually paid or any other issues, the property is hugely important to the company. For many years before the brand became a chain, the Oxford Circus store was Topshop. Its status not just as flagship but as the source of the brand itself means it’s vital to the whole Topshop concept.
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