Chinese fast-fashion e-tailer Shein is now seen as the frontrunner for Topshop after Next plc dropped out of the running.
After Arcadia Group collapsed into administration on Nov. 30, a number of contenders from Next to Mike Ashley’s Frasers Group to brand management firm Authentic Brands Group (ABG) have kicked the tires on the assets of Sir Philip Green’s crumbling empire. While Next, in a joint bid with U.S. hedge fund Davidson Kempner Capital Management, had put in an initial offer for Arcadia, apparently it wasn’t enough to satisfy administrators.
“Next plc announces that it has withdrawn from the process to acquire any, or all, of the Arcadia Group from the administrator, as our consortium has been unable to meet the price expectations of the vendor,” a company spokesman told Sky News Thursday night.
According to Sky News, Shein has reportedly put in an offer topping 300 million pounds ($409.7 million) for Topshop and Topman, considered Arcadia’s crown jewels.
Still unclear is whether administrators were focusing on the best offer for Arcadia as a whole, or looking at bids for the Topshop/Topman duo, considered the company’s crown jewels, while considering the other brands, including Burton, Dorothy Perkins and Miss Selfridge, separately.
Before the coronavirus pandemic, Arcadia was valued at 800 million pounds ($1.09 billion) a year ago, one source said, with Topshop representing about half that valuation. Post collapse, those valuations are now half the original estimated amounts. That suggests that Shein’s offer could be for the entire Arcadia empire.
ABG is working on a joint offer with JD Sports Fashion. There’s also been talk that it might be working with Frasers Group, with each looking to take over the brands it is interested in if they cobbled together a successful bid.
Frasers Group is believed to be interested in Dorothy Perkins, in part because it is the largest concession operator within the bankrupt Debenhams department store chain. Ashley has circled the beleaguered chain several times. Currently, Debenhams in set to liquidate in March, barring a last minute push by Ashley to save the chain if he can negotiate a deal.
Founded in October 2008, Shein is an international fast-fashion e-commerce platform. It focuses on women’s fashion, but also sells apparel, accessories and footwear for men and kids, and primarily targets the European, American, Australian and Middle Eastern markets. In addition to its own in-house production team and manufacturing processes, Shein operates global fulfillment warehouses.