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Arcadia ‘considers options’ to replace £100m BHS concession revenue

Arcadia is “considering various options” to replace the £100m annual revenue generated through Dorothy Perkins, Wallis and Burton concessions within BHS stores, Drapers understands.

“The business is considering all options to replace those sales,” a source from Arcadia told Drapers.

BHS, which is in the process of being wound down by administrators, took more than £100m in retail revenues for the Arcadia concessions that operated in its stores, BHS chief executive Darren Topp said in new evidence submitted to MPs last week.

The exact number of Arcadia concessions has not been confirmed but Topp has previously told Drapers that BHS had 137 Wallis and 125 Dorothy Perkins concessions within its stores. 

“Arcadia is likely to be speaking to all sorts of parties from department stores and etailers to the food retailers in a bid to replace that revenue stream,” said a financial source.

Arcadia embarked on a trial with Tesco in October last year, launching Dorothy Perkins, Burton and Evans concessions in five Tesco stores (Horwich in Greater Manchester, Culverhouse Cross near Cardiff, Chesterfield, Woolwich in south-east London and Bradley Stoke in Bristol).

In March it opened concessions for Dorothy Perkins, Burton and Evans at a Tesco store in Leicester and Drapers understands Tesco is pleased with the feedback from the trial so far.

Retail consultant Richard Hyman suggested that Arcadia would need to open 350 concessions to make up the lost sales from BHS.

“It’s all very well putting a handful [of concessions] in Tesco stores but they would need a lot more to make up that kind of revenue and the profitability Green would have secured in the BHS deals.”

Arcadia also has Dorothy Perkins concessions in Debenhams and House of Fraser, and it signed a deal to open Dorothy Perkins concessions in Midcounties Co-operative stores – the largest independent co-operative – in June last year. A separate source told Drapers that Dorothy Perkins is the fourth biggest brand on Zalando and is also sold through international etailers Jabong, Namshee and Zalora.

The source said that Arcadia has been growing its wholesale and concessions business for some time and disputed that this is related to the BHS developments. 

The retail group has been stepping up the expansion of its Outfit fascia, which combines Burton, Dorothy Perkins, Evans, Miss Selfridge, Topman, Topshop and Wallis under one roof, and will open a new store in Biggleswade later this year, taking the total to more than 75 stores.

“Our customers have shown enthusiasm to shop our brands across multiple channels,” said an Arcadia spokeswoman. ”Therefore we continue to trade our brands in the UK but also remain focused on the growth of our multiples brand operation globally.”

Arcadia exited 86 stores and 236,400 sq ft of retail space in the UK in the year to August 25 2015, ending with 2,358 stores, and is continuing to review its property portfolio as leases expire.

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