Sir Philip Green’s retail empire Arcadia, which includes high-street fashion brands Topshop, Miss Selfridge and Dorothy Perkins, is reportedly on the brink of collapse.
13,000 jobs are now at risk after Sir Philip failed to secure a £30million loan from investors to help the business through Christmas.
Responding to a Sky News report that they were set to appoint administrators from Deloitte, the Arcadia Group 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.’
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, also told BBC, ‘Arcadia would be the biggest British corporate collapse of the pandemic if it does enter voluntary liquidation.
‘It would hollow out huge swathes of the High Street, if its huge footprint of stores were forced to close.’
The most likely option for Arcadia is a process called light-touch trading administration, whereby management retain control of the running of the business while administrators look for buyers for all or part of the company. This protects the business from creditors while administrators look for other options for the company’s future.
After launching in the 1900s as a menswear business, Arcadia moved to include womenswear in the 1946 before Topshop was launched in the 1960s. Topman then launched in 1970 and the group continued to grow, acquiring Evans, Dorothy Perkins, Wallis, Miss Selfridge, Outfit and Burton over the next 30 years. Arcadia now operates around 500 standalone stores.
However the company has been struggling to keep up with fast-fashion digital competitions such as Boohoo and ASOS. Last June, it narrowly avoided administration through an agreement with creditors that involved 1,000 job losses and 50 store closures, while it announced 500 job losses at its head office in July this year.
The Covid-19 pandemic has also harmed the company, as non-essential shops in England have been forced to close for four weeks until 2 December following an even longer lockdown earlier this year.
Arcadia follows many other high-street retailers that have gone into administration, collapsed or declared bankruptcy this year. Oasis and Warehouse were snapped up by Boohoo in June, while Laura Ashley and Cath Kidston went into administration.