The sale of Topshop could give Sir Philip Green’s family a windfall of £50m ($68.6m), as the high street stalwart moves closer to securing its future.
According to a report by the administrators from Deloitte, seen by The Guardian, the brand’s unsecured creditors, including suppliers and landlords — who are owed a collective £51m — are set to recoup less than 1% of what they are owed.
The report said there is also a gaping hole in the money owed to HMRC, and its debts stand to be higher once taxes and money owed to its pensions fund are factored in.
The Green family business Aldsworth Equity lent £50m to Topshop in march 2019, secured against its warehouse in Davntry, Northamptonshire.
On Monday, online fashion giant Asos (ASC.L) confirmed was “in exclusive discussions” with the administrators of Sir Philip Green’s Arcadia empire to acquire its Topshop, Miss Selfridge, Topman brands, as well as fitness brand HIIT.
Sky News reported that Asos is due to pay more than £250m for the high street brand.
Arcadia went into administration in November last year, and its various brands are currently being auctioned off, including Evans, Burton and Dorothy Perkins. At the time there were reports that its debts totalled £750m.
Asos, which is now in poll position, joined a list of bidders for the fashion house, with the likes of Authentic Brands, the US owner of Barneys department store, and online rivals Shein and Boohoo (BOO.L) thought to be in the running. Next (NXT.L) pulled out of the auction over last weekend.
Any deal would be for the brands and not the high street stores, and could wrap up Green’s remaining retail interests and the closure of all 444 stores in his retail empire.
Arcadia employed as many as 13,000 people when it collapsed.
The acquisition would be a change in strategy for Asos, which has previously favoured the approach of creating its own brands for expansion rather than integrating others.
Aldsworth Equity will be paid before funds are distributed to suppliers, landlords and HMRC, the Guardian report said, and the rest of the payout will depend on the final price for the brand.
Watch: What do Topshop and Debenhams deals mean for the future of the high street?