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Sir Philip Green’s retail empire is teetering on the brink of administration, putting 15,000 jobs at risk as months of high street shutdowns take their toll.
Arcadia Group, which owns Topshop, Miss Selfridge, Dorothy Perkins, Wallis, Evans and Burton, admitted it was “working on contingency options” to secure its future after a “material impact” on sales from the coronavirus pandemic.
It is understood that the most likely option is a process known as a light-touch trading administration, in which management would retain control of the day-to-day running of the business while administrators seek buyers for all or parts of the company.
The process, currently being used by ailing retailer Debenhams, protects the business from creditors while options for its future are considered. Arcadia operates about 500 standalone stores.
Responding to a Sky News report that Arcadia was set to appoint administrators from Deloitte, the company said in a statement: “The forced closure of our stores for sustained periods as a result of the Covid-19 pandemic has had a material impact on trading across our businesses.
“As a result, the Arcadia boards have been working on a number of contingency options to secure the future of the group’s brands. The brands continue to trade and our stores will be opening again in England and the Republic of Ireland as soon as the government Covid-19 restrictions are lifted next week.”
Arcadia has been suffering from heavy competition from new rivals such as Boohoo and Asos for some time. It follows years of underinvestment in online selling under Green’s stewardship.
In July, it announced 500 job losses at its head office as it tried to cut costs after it narrowly staved off administration in June 2019 through an agreement with creditors that involved 1,000 job losses and about 50 store closures. Early in the crisis it asked landlords for rent cuts and temporarily paused payments into its pension scheme. It has recently been searching for £30m in funding to help it through the peak trading period.
Like all fashion chains it has suffered heavily from a slowdown in spending on fashion as pubs, clubs and many workplaces have been closed for much of the year. Groups that are heavily reliant on their stores have suffered further as high street lockdowns have not been made up for by online sales.
Source: The Guardian
Keyword: Philip Green’s Arcadia on brink of collapse, putting 15,000 jobs at risk | Business