The recently collapsed Arcadia Group’s brand portfolio could be worth up to £800m, offering what analysts say is an unmissable opportunity for strategic acquisition.
In January 2020, analysts at Brand Finance estimated the value of the Arcadia Group portfolio of brands – which include Topshop/Topman, Wallis, Burton, Miss Selfridge, Dorothy Perkins and Evans –
to be around £800m, with Topshop accounting for a substantial proportion.
While that figure will have been eroded by its collapse, the brands within the group on their own come with considerable value and could well be snapped up by other players as a result.
Already online fashion retailers Boohoo has been tipped as a possibly buyer for all or some of the fashion groups main brands – particularly Topshop and Miss Selfridge – but Mike Ashley’s Fraser Group, which bought up the remains of House of Fraser and other high-profile high street casualties, is also a potential stalking horse, analysts believe.
The Arcadia Group was laid low by a failure to adapt to online before the pandemic forced shoppers to go digital, as well as high property costs from a huge physical retail presence. Any buyer would potentially be looking to leverage the brands online and would be unlikely to keep many of the stores open. Many jobs could be lost.
Richard Haigh, Managing Director of Brand Finance, explains: “Despite the huge brand value at the start of the year, none of Arcadia’s portfolio was on the balance sheet. Much of the value will now have been lost due to the collapse of the business but Arcadia going into administration offers an unmissable opportunity for strategic acquisitions. Deloitte will have an interesting job extracting the value from an impressive portfolio of brands.”
Topshop has a long history on the British High Street, starting as high fashion for the "young and different generation" in the mid-1960s, and – despite some natural changes and adaptions – has maintained its appeal over the years, believes Haigh.
According to Brand Finance’s Global Brand Equity Monitor survey, 93% of UK consumers are aware of Topshop and 60% are familiar with the brand. Furthermore, 73% of those familiar would consider purchasing from the retailer - these figures are in no way the hallmark of a dead brand.
Haigh adds: “Topshop’s sheen has slipped in recent years – not helped by the various scandals that owner Philip Green has found himself in, from the BHS collapse to bullying and harassment claims. The fall of Arcadia represents the slow crumbling of bricks and mortar retail as online competition continues to develop. The question is: will Topshop be consigned to the bin or will it be given another chance? There is life left in the brand if it finds its way into the hands of someone with the correct vision and strategy.”