Next has pulled out of the race for Topshop following a frenzied bidding war for Sir Philip Green's flagship fashion brand.

The FTSE 100 chain, which was working with US investment firm Davidson Kempner Capital Management - the owner of Oak Furnitureland - said it could not match its rivals' bids.

The retailer is Britain's largest clothing chain and was a frontrunner in the race to buy Topshop - Arcadia's most iconic brand which collapsed into administration last November.

The withdrawal may now clear the way for Shein to buy Topshop for more than £300million, according to reports.

The Chinese fast-fashion giant tabled a deal at the last minute - but it is now believed to be the highest offer.

Other potential buyers include Boohoo, Asos and New York-based conglomerate Authentic Brands, which is working with JD Sports.

There are 13,000 jobs at risk from Arcadia's collapse, and many of its 500 stores are unlikely to survive.

Next pulls out of Topshop rescue deal as Shein, Boohoo, Asos and JD Sports table bids
The retail empire, owned by Sir Philip Green, collapsed into administration in November after it became the latest company hammered by the coronavirus pandemic

On Tuesday, administrators announced plans to permanently shut another 31 stores by the end of January, at a loss of 714 more jobs.

It is understood that the latest round of cuts will result in the closure of 21 Outfit stores and a further 10 branches across other brands including Miss Selfridge and Dorothy Perkins.

Outfit, which was acquired by Arcadia from Sears in 1999, is not a fashion brand itself but sells all of Arcadia's retail brands in out-of-town destinations for shoppers.

Meanwhile, Arcadia is preparing to permanently close its flagship Topshop store in central London.

Administrators to Redcastle Limited, which owns Topshop's 90,000 square foot estate on 214 Oxford Street, have appointed Eastdil and Savills to explore a sale of the iconic property.

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Last month, administrators agreed the sale of Arcadia's plus-sized brand Evans to Australian firm City Chic Collective in a £23million deal.

The rest of the firm, which includes other high street names such as Dorothy Perkins and Wallis, is being auctioned.

Shore Capital analyst Greg Lawless said: "What we are seeing is the stronger retailers scaling up. Those with a strong balance sheet are getting bigger as the fallout from Covid on the high street is started to be felt."

Other firms believed to be looking at all or parts of the firm include Boohoo and Mike Ashley's Frasers Group. 

Melanie Leech, chief executive of the British Property Federation, said: "Property owners will be essential economic partners to the successful bidder and will want to work closely with them to ensure a positive future for viable stores."