LONDON — The last of the fallen Arcadia Group’s assets, its famous Topshop flagship on 214 Oxford Street, Oxford Circus, has found a buyer.
Swedish furniture giant Ikea bought the retail space, the former glory of Sir Philip Green’s Arcadia Group, paying 378 million pounds, or $522 million, for the leasehold, 7 million pounds lower than the previously reported 385 million pounds.
Krister Mattsson, managing director of Ingka Centres, Ikea’s shopping center arm, said: “This property offers great potential for retail space, and we firmly believe in the long-term value of the real estate market in London.…Securing ownership of properties in prime locations instead of leasing will preserve value on a long-term basis.”
Peter Jelkeby, country retail manager and chief sustainability officer of Ikea U.K. and Ireland, added that bringing Ikea to the heart of London is “an exciting step forward in our journey to becoming a more accessible Ikea.”
“Today, we are seeing societal changes that have evolved customer behaviors and the retail industry as a whole….Even though online shopping continues to accelerate at a rapid pace, our physical stores, large and small, will always be an essential part of the Ikea experience,” he said.
The deal represents a much-needed confidence boost for central London, which has seen tourist footfall decline since the pandemic.
Three floors of the building, which comprises a total of 239,000 square feet over seven floors with retail space on six floors, would be turned into an Ikea store due to open in the summer or fall of 2023, and it will feature click-and-collect as well as click-and-deliver functions and planning studios. However, the new store won’t be serving the brand’s famous Swedish meatballs, which are only available at the bigger, out-of-town outlets.
Long-term tenants including Nike and Vans will continue their operations in the building.
Ikea is thought to have bested rival bidders including Stefan Persson, the majority owner of Swedish fashion retailer H&M, as well as Mike Ashley’s Frasers Group, the owner of Sports Direct and House of Fraser.
The affordable furniture-maker has announced plans to expand into city center stores to push post-pandemic recovery. It has opened shops in major cities such as Tokyo, Madrid, Moscow, Paris and New York. It has also recently expanded its property team and in January, bought its first shopping center, Kings Mall, in Hammersmith, West London, which will be converted into Ikea’s first smaller store format in the U.K this winter.
The former Topshop flagship was one of the most prominent retail sites in the U.K. The 100,000-square-foot store had been occupied by Topshop since 1994 and has been known as one of the top tourist attractions in the British capital.
When Green’s Arcadia Group filed for bankruptcy last November, Asos bought the Topshop inventory and intellectual property for 330 million pounds, but not to buy the physical store portfolio.
The sale of the flagship on Oxford Street will go toward settling the 312 million pound mortgage taken out on the building in 2019, with roughly 40 million pounds expected to go to Arcadia’s pension fund.
Arcadia, which owned around 450 directly leased stores in the U.K. and 22 abroad, was one of the biggest corporate casualties of the pandemic. The group’s brands had long suffered from underinvestment and had failed to adapt to the rise of online retail and digital marketing.