Swedish furniture brand Ikea is set to buy the retail space, the former glory of Sir Philip Green’s Arcadia Group, paying a reported 385 million pounds for the leasehold.
One of the most prominent retail sites in the U.K., the 100,000-square-foot store, which is located next to Nike Town, 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.
Ikea is thought to have won 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.
Declining to confirm the sale, an Ikea U.K. and Ireland spokesperson told WWD: “We are on a journey to create a new Ikea that is even more affordable, accessible and sustainable. As part of our accessibility plans in the U.K. and Ireland, we are constantly looking for new ways to better meet our customers’ needs. This includes investing in our online offer, rebuilding and adapting existing Ikea stores, and exploring different formats and locations as part of a new city center approach. We review our expansion strategy on an ongoing basis but have no plans to share at this time.”
Ikea has announced plans to expand into city center stores to push post-pandemic recovery. It has also recently expanded its property team and in January, bought its first shopping center, Kings Mall, in Hammersmith, West London.
Gerard Groener, the managing director of Ingka Centres, Ikea’s shopping centre arm, has said: “Our urban projects are all about getting closer to more people. More of our customers are living in cities than ever before and a regenerated Kings Mall will be an ideal location for reaching millions of Londoners.”
Given the prime Oxford Street location, the company’s expected flagship is thought to be used as a showroom for home delivery. The lack of parking means it’s unlikely Ikea will sell furniture directly from the store.
Teneo, Arcadia’s joint administrator, declined to comment.