By Matteo Castia

A potential 1.4 billion pounds ($1.87 billion) of revenue from clothing retailer Arcadia and GBP1.8 billion from department-store Debenhams is up for grabs as British peers gain on the collapse of the two large competitors.

Arcadia said late Monday it had appointed administrators to the business and various subsidiaries, while Debenhams entered into administration back in April. In both cases, the coronavirus pandemic has dealt the final blow to already struggling businesses.

Sport fashion company Frasers Group PLC attempted and failed to take over Debenhams and said Monday it would be interested in Arcadia assets, while sport-goods retailer JD Sports has terminated talks about taking over Debenhams.

The race to secure brands from the collapsing chains on, with online fashion retailer Boohoo in pole position thanks to its recent capital raise to expand its portfolio, according to U.S. bank Citi.

Boohoo would be the most logical owner of Arcadia's Topshop and Topman brands, while the remaining ones would better fit in with Marks & Spencer Group PLC's customer base, the bank said.

"However, the lack of a compelling digital offer is clear and in this regard the Next PLC's Total Platform makes sense if a third party is prepared to invest in the Dorothy Perkins, Wallis or Burton brands," according to Citi.

Arcadia employs around 13,000 people across 444 sites in the U.K. and 22 overseas. Citi said Arcadia's fall into administration caps off years of losing market share to competitors, with the main beneficiaries in the U.K. being online fashion retailers Asos PLC and Boohoo, Swedish clothing retailer H&M Hennes & Mauritz AB, and Associated British Foods PLC's clothing arm Primark.

The potential closure of Debenhams is likely to be good news for Primark, M&S and Next, Citi added.

Shares in JD Sports, Frasers Group, Next, H&M, Boohoo, Marks & Spencer, Asos and AB Foods are rise, with Frasers Group making the most progress, up 4.5% at 440.8 pence.

Write to Matteo Castia at matteo.castia@dowjones.com

(END) Dow Jones Newswires

December 01, 2020 05:56 ET (10:56 GMT)

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