British retailer Arcadia Group, owner of Topshop, files for bankruptcy.
Arcadia Group, the UK retail company owned by Philip Green that includes clothing chain Topshop, has been placed in receivership, a form of bankruptcy, the company said on Monday. It is one of the biggest retail collapses in Britain since the start of the pandemic.
Deloitte has been appointed director. Arcadia, which has 444 stores in Britain, 22 overseas and around 13,000 employees, said it would continue to operate during administration.
Ian Grabiner, the group’s chief executive, said in a statement he had hoped the company could “weather” the pandemic. “Ultimately, however, in the face of the most difficult trading conditions we have ever seen, the obstacles we encountered were far too severe,” he added.
No layoffs were announced on Monday, but it’s still unclear how many jobs could be saved as the administrator takes care of the group’s finances.
Arcadia has reportedly been looking for a £ 30million ($ 40million) lifeline, but on Monday the Fraser Group, a retail chain owned by rival businessman Mike Ashley, said his £ 50million loan offer was turned down.
Arcadia said on Friday that closures aimed at curbing the spread of the coronavirus had had a “significant impact” on its business. In recent years, the company has struggled to keep up with its fast-fashion online competitors, and its reliance on physical stores has been a drawback as the virus hastened Britain’s long-standing mainstreet disappearance.
Earlier this month, during a period of lockdown where non-essential stores were forced to close in England, foot traffic in UK shopping areas fell by 60% compared to last year, according to data from Springboard. Since February, online retail sales have grown 45% in Britain, while clothing sales – online and in person – have declined 14%, the Office for National Statistics said earlier this month. -this.
Last year, Arcadia entered into a voluntary corporate agreement, a type of agreement that insolvent businesses can make with their creditors and continue to operate. She has closed more than 80 stores and renegotiated the rents of others. It also filed for bankruptcy in the United States and closed all of its stores there.
The Arcadia collapse is a new low in the career of Mr Green, who was once considered the “King of the Streets” but has recently been the subject of allegations of racial and sexual harassment. He lives in Monaco, is frequently photographed aboard his yacht 295 feet long, and used to fly to London in his private jet.
In 2006, Mr. Green was knighted for “services to the retail industry”. But Mr Green’s reputation was hit after selling BHS, a department store chain founded in 1928, for £ 1 in 2015 and the company collapsed a year later with a pension deficit of £ 571million . This sparked a parliamentary inquiry and in 2017 Mr Green agreed to pay £ 363million into the pension scheme.