- Sir Philip Green’s Arcadia Group retail empire could appoint administrators next week
- The move will potentially place 15,000 jobs at risk and 500 stores at risk of closure
- Arcadia Group owns Topshop, Topman, Dorothy Perkins, Burton, Wallis, Evans and Miss Selfridge
By guest author Elias Jahshan from Retail Gazette
Arcadia Group is on the verge of becoming the latest Covid pandemic-induced high street causality, with reports suggesting it is about to go into administration – a move that could put 15,000 jobs at risk.
According to Sky News, Green’s retail empire is preparing to appoint administrators from Deloitte as early as next week, after talks with a number of lenders about an emergency £30 million loan hit a dead end.
While it’s not clear whether a plan has been finalised, an Arcadia Group spokesperson confirmed that it was “working on a number of contingency options” to secure the future of its stable or retail fascias, which includes Topshop, Topman, Dorothy Perkins, Burton, Wallis, Evans and Miss Selfridge.
“We are aware of the recent media speculation surrounding the future of Arcadia,” the spokesperson said.
“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 ROI as soon as the government Covid-19 restrictions are lifted next week.”
If an administration is confirmed, Arcadia Group’s assets – including stores and online operations – would be up for grabs.
The retail empire employs around 15000 and operates around 500 standalone stores.
Its stores were all shut for three months during the UK-wide lockdown over the spring, and the majority closed again because of the second and four-week lockdown in England – as well as its stores in Ireland which has been in lockdown for six weeks.
There is a chance Arcadia Group’s stable of fashion retailers could become online-only, in the same vein as Oasis & Warehouse after it went into administration and was bought out by Boohoo Group.
Sky News also said Boohoo Group could be one of the prospective suitors for Green’s retail empire, should it collapse.
However, among its creditors, Arcadia Group’s pension scheme is likely to have the biggest claim on proceeds generated by Deloitte.
Green himself is also reportedly unlikely to express interest in buying back any of Arcadia Group’s trading operations or retail fascias from administrators.
Should an administration be confirmed, it would follow an eventful few years for the business.
Arcadia Group announced 500 head office job cuts earlier thus year, and in September the former London headquarter for Burton was put up for sale in a bid to seek fresh funds for the company.
In addition, last year the firm launched a CVA which saw it close down several stores – including Topshop sites the US.
However, Green was only able to secure that CVA after he pledged a package of assets worth more than GBP 400 million to Arcadia Group’s pension scheme.
Should an administration go ahead, some of that funding could be jeopardised.
Speculation of another restructure at Arcadia Group has been circulating for months, but earlier this month news emerged that its directors were intensifying preparations for the appointment of administrators – although Arcadia Group said at the time that there was no imminent plan to appoint administrators.