Arcadia, which runs the Topshop, Dorothy Perkins and Burton brands, is definitely distressed but doing a deal with Sir Philip Green will be extremely challenging.
Ashley told me he wants the whole of the Arcadia business, including all eight of its clothing brands. But he’s unlikely to want to pay not very much for it, if anything at all.
Arcadia is loss-making, it has debts, the pension scheme is in deficit and the business is running out of the cash it needs to keep going.
Personality could also be a problem: Sir Philip and Ashley both have strong characters and are rivals.
In fact, the simplest and the most obvious way for Ashley to acquire Arcadia would be to buy it, debt-free, out of administration.
If a deal between Ashley and Sir Philip isn’t done then Arcadia’s options are limited.
The board can try to borrow more money or Sir Philip could choose to put more of his own money into the business.
Otherwise it looks like administration and Deloitte will be asked to look for a buyer.
There would undoubtedly be interest in Arcadia’s clothing brands, the online operation and some of the shops, but the group wouldn’t survive in its current form and there would be significant job losses.
What happens next depends on Sir Philip who is in Monaco and not answering his phone.