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Arcadia? Lord of the Rings? Which is Duller?

Posted on Jan 22, 2021. by NTI

By the time Billy read that Gandalf and Pippin arrived at Minas Tirith, where Lord Denethor (who apparently ruled Gondor as steward in the absence of the king) already knew of the death of his son Boromir, he wanted to take his own life. His friends had read The Lord of the Rings and he felt it was his duty to do so - he just could not be out-Frodoed. However, by page 729 he just couldn't take any more; as classics went, it it was a yomp through marshland.

It is much the same way with the latest episode of Arcadia: Sore-One Defeated. As an insolvency professional you feel a duty to care to know the latest developments, but would rather be sweeping the floor of a physics lab with a toothbrush. The latest version in the Arcadia yawn-of-ages is equivalent to Pippin disobeying Denethor but following Gandalf’s instructions and lighting the Beacon of Minas Tirith, with Next pulling out of the race to acquire the tattered remains of Philip Green's fallen kingdom, after looking at the price tag for chains including Topshop and Topman and electing to go for a coffee and trying a better store.

Deloitte appear to be valuing Topshop at between £250 million and £300 million and Next, who are one of the supreme survivors of the last days of retail, know this to be too steep for their intentions. Other bidders are said to be using a possible purchase of Arcadia as an entry into UK retail and are not scrutinising the price tag too closely, but Next are to wily for this. The last vestiges of the race is said to be between Shein, a Chinese fast-fashion retailer (mmm, Chinese fashion), and Authentic Brands, a New York City-based brand management company, which has teamed up with JD Sports. Now there's a 'lose-lose'.

Meanwhile, there are reports today that the John Lewis Partnership expects to end 2020 with a report of a profit, after better-than-expected trading during Black Friday and over the festive season. The NTI newsroom have made no secret of our admiration for Dame Sharon White, the chair of the Partnership, and her boss (who is also technically her employees), the owner, said that full-year profits were now expected to be ahead of guidance in September when it forecast a small loss or a small profit.

This performance has enabled John Lewis to repay a £300 million loan from the Government and Bank of England’s emergency support scheme two months early.  All of this impressive growth was at a time when the official UK deficit grew by another £34 billion, up from £30.8 billion in November and above economists’ forecasts of £32.2 billion, according to the Office for National Statistics. December 2020's borrowing figure was the third highest since records began in 1993.

Tax receipts were down by only £1.4 billion, or 1.2 per cent, to £43.6 billion (mainly due to Neil not paying his until the end of this month), thanks to growth in corporation taxes and stability in income tax receipts. The decline was driven by weaker VAT and business rates receipts.

Retail, eh? A never-ending story.

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