Topshop owner Arcadia collapses putting 13,000 jobs at risk
Sir Philip Green’s retail empire Arcadia, the owner of Topshop and Dorothy Perkins, has collapsed into administration, putting more than 13,000 jobs at risk.
The company, which has become the biggest retail casualty of the coronavirus crisis, announced this evening that it has appointed Deloitte as administrator.
More than 13,000 jobs are at risk following the collapse, although stores will continue to trade throughout the Christmas period while Deloitte hunts for a buyer.
Deloitte said no redundancies were being announced today.
“This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders,” said Arcadia chairman Ian Grabiner.
“Throughout this immensely challenging time our priority has been to protect jobs and preserve the financial stability of the group in the hope that we could ride out the pandemic and come out fighting on the other side.
“Ultimately, however, in the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe.”
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Deloitte said it was assessing all options available to the group, adding that it would honour all orders made over the Black Friday weekend.
The current company voluntary arrangements in place for a number of the brands in Arcadia’s group will come to an end as a result of the administration.
Mike Ashley’s retail empire tabled an offer of a £50m loan to Arcadia, which also owns Evans, Burton and Wallis.
But the ailing company turned down the offer. In a response seen by Morning Wire chairman Andrew Coppel said: “We are grateful for your interest; however, we shall not be progressing it and, therefore, shall not be discussing the matter further.”
Ashley’s Frasers Group also expressed interest in participating in the sale process should Arcadia collapse.
Retail analysts said the company had failed to keep up with competition from online rivals such as Asos and Boohoo, which was today mooted as a potential buyer for Arcadia’s brands.
The firm secured a company voluntary arrangement last year to allow it to close stores and renegotiate rents with landlords.
However lockdowns during the coronavirus pandemic have piled the pressure on the retailer, which was still dependent on its physical stores.
A total of 9,294 employees were on furlough at the time of Deloitte’s appointment as administrator.
The group’s impending collapse came to light on Friday after it emerged talks with lenders over a potential £30m loan had fallen through.
Arcadia had said it was seeking the loan to help it survive following the “material impact on trading” prompted by the pandemic.
It comes 18 months after Green’s empire narrowly avoided collapse by securing a company voluntary arrangement that led to 1,000 job cuts and 50 store closures.