In a distant corner of retail, as the news about Arcadia's likely demise broke, online rival PrettyLittleThing (PLT) was thriving thanks to the Black Friday shopping frenzy.
PLT’s 32-year-old co-founder Umar Kamani said he would give away £10,000 to shoppers who missed out on its 99pc discounts after twice selling out.
In an incredible reversal of fortunes PLT - which was only founded in 2012 - and Philip Green’s Topshop, the jewel in the crown of Arcadia, could soon be sister brands.
PLT’s owner Boohoo was set up by Mahmud Kamani and Carol Kane, who once supplied clothes to Green's Topshop. They decided to strike out on their own online, playing a direct part in Arcadia’s downturn in sales as young shoppers defected to Kamani’s brand, and subsequently to the likes of PLT. That has contributed to a substantial blow to profits that resulted in a loss close to £100m in 2018.
Boohoo has been on a acquisition spree of distressed brands, making it an obvious contender for Arcadia, retail pundits say.
“Boohoo has delivered tremendous returns on acquisitions, picking up brands relatively cheaply and scaling quickly, generating a swift payback and strong medium-term returns,” says John Stevenson and Jonathan Pritchard at broker Peel Hunt.
So far, however, it has only bought the name and websites of Karen Millen, Coast, Oasis and Warehouse after they collapsed, but not the stores, spelling trouble for thousands of shop floor staff.
“The question is whether Boohoo sees the Arcadia brands slotting into its portfolio for the future. On a global stage, Topshop would still be the prized asset," say Stevenson and Pritchard.
Arcadia also owns Burton, Dorothy Perkins, Evans, Outfit, Miss Selfridge and Wallis. Just five years ago the chains were the fourth-largest clothing retailer in Britain.
Now they are at the bottom of the top 10 UK clothing players. An increasingly diverse offering from rivals such as Primark, H&M, and Zara as well as Asos has also lured shoppers away from Arcadia, which has shedded market share in recent years.
“Those brands, except Topshop, peaked before Philip bought them. He has done spectacularly well to keep them going, and the writing has been on the wall for some time,” says Richard Hyman, an independent retail analyst. “But a lot of people smell the money and will want to buy them if you can sell a dress for £35 and you can buy it for £2 [from administration].”
Mike Ashley has already said he would be open to a deal to take over all of the brands, especially after he lost out in the bidding process for both Debenhams and some of Philip Day’s chains that are also in administration.
Hyman adds: “The question is, ‘how much influence will Philip [Green] have over the administration process?’ I would imagine that he would be extremely upset at the idea of Mike Ashley ending up with any of his businesses.”
The two tycoons go back a long way. Green nicknamed himself “the Emperor” of retail at the peak of his powers. Ashley, a protégé of his at the time, was affectionately dubbed the “Little Emp” by Green as Sports Direct went from strength to strength.
The pair fell out last year when it was claimed Green derailed Ashley’s efforts to buy music chain HMV, which had been owned by Hilco when it collapsed. Green denies any involvement.
Chloe Collins, a retail analyst at GlobalData, also thinks that Boohoo could bid for Topshop and Topman after administrators are formally drafted in.
“Topman would really boost its menswear offer, which has always lagged behind its women's brands, and its social media and influencer marketing skills could definitely benefit Topshop,” she says. “A deal would be likely to involve the closure of stores though. The brands would be really missed if they were to disappear from the high streets altogether.”
But while Boohoo and others would be primarily interested in the brands and the stock, the administrators could yet favour a deal that will keep the stores open.