Arcadia bank to act as guarantor to suppliers

The deal between HSBC and the Topshop owner also gives the bank security over millions of pounds of the retailer’s cash deposits, the Mail on Sunday reported.

The arrangement, described by one City source as “unusual”, was struck as Arcadia prepares to restructure and after it was forced to pay some suppliers in advance when credit insurance was cut.

Arcadia, whose fascias include Dorothy Perkins, Miss Selfridge, Burtons, Evans, Wallis and Outfit, as well as Topshop and Topman, is understood to be planning a CVA.

The retailer has been discussing its turnaround proposals with landlords and talks are understood to be due to continue tomorrow.

According to the Mail on Sunday, Arcadia insiders denied that the agreement with HSBC was significant and said it only related to several million pounds’ worth of annual revenues of more than £1.8bn.

Arcadia hopes to close about 25 stores and win lower rents on others. One landlord said the retailer’s stores are operated through a “complicated” network of smaller subsidiaries, meaning that it must win over more landlords than has been the case in other similar restructures.

The retailer also hopes to halve its annual £50m contributions to employee pension schemes.

Green has proposed offering Topshop’s flagship store on London’s Oxford Street as security to the pension funds.