Global retail giant Ikea is in advanced talks to buy one of the UK’s most prominent stores for as much as £385M — a big price, but one that could leave pensioners of collapsed retailer Arcadia out of pocket.

Ikea is buying 214 Oxford Street from administrators at KPMG, React News reported. The building on Oxford Circus comprises a 90K SF vacant former Topshop store, a 70K SF Nike store and a 4,700 SF Vans store.

The building is owned by a subsidiary of Sir Philip Green’s Arcadia, the retail group that went into administration in December 2020.

Ikea would use the vacant Topshop space to create a flagship unit on what is still Britain’s most famous high street, as it looks to expand its model beyond its traditional out-of-town big-box format. It has been looking to gain a presence on Oxford Street for several years, React said.

It would be by far the biggest new retail presence on the street in recent years. More typical has been the trend of owners of buildings leased to department stores taking back defunct retail space and converting it to offices.

The are two significant creditors owed money by the subsidiary that owns the building. One is private equity firm Apollo Global Management, which in 2019 provided a £310M loan secured against the asset to refinance a maturing debt facility from Royal Bank of Scotland. It is the most senior creditor, so gets repaid its money first. That means a sale at £385M would see it repaid in full.

In a more uncertain position are the pensioners who have their money in the Arcadia pension scheme. That had a big deficit and took a charge of £185M against the building. A sale at £385M would leave the pension scheme £110M out of pocket.