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The High Court has appointed joint provisional liquidators for four Irish operating companies that are part of the UK’s Arcadia Street fashion group.
The companies, including Topshop / Topman Ireland, together employ 487 people in 14 stores in the Republic and also have stalls in various locations.
The sale of the Irish operations is expected to be secured as part of a general sale of the Arcadia group, and the intention is for Irish stores to continue trading under interim liquidators until Christmas to maximize the value of winter fashion stocks, he was told. To the court.
The application for the appointment was submitted on Monday evening immediately after the appointment of interim trustees for Arcadia Group (AGL) in the UK.
AGL owns the Topshop, Topman, Dorothy Perkins, Wallis Retail Ireland Ltd, Miss Selfridge, Evans, Burton and Outfit brands, which trade in more than 500 stores in the UK and employ over 13,000 employees.
John Lavelle, instructed by Arthur Cox’s lawyers, told the court that Irish companies are totally dependent on AGL for trading and that they cannot operate independently of the Arcadia group as a whole.
UK entities own the relevant trademarks and intellectual property rights, operate the online platforms and own the leasing interests in the premises used by Irish companies, the court heard.
In an evening session, Judge Michael Quinn accepted the request to appoint Ken Fennell and James Anderson of Deloitte as joint interim liquidators.
The companies are Arcadia Group Multiples Ireland Ltd, Topshop / Topman Ireland Ltd, Wallis Retail Ireland and Miss Selfridge Retail Ireland.
Difficulties
The judge was informed that the companies were unable to pay their debts for reasons that included the insolvency of the Arcadia group as a whole.
Businesses had encountered difficulties before this year for reasons including the shift to online sales and increased competition, and those difficulties were compounded by the Covid-19 pandemic.
The impact on Arcadia’s Irish operations was “particularly severe,” as Irish stores, which were closed for 23 weeks, saw revenues plummet by as much as 60 percent, the lawyer said.
Because the online sales were conducted through UK entities, Irish companies did not generate any income from those sales, with all four companies posting losses in the financial year to the end of August 2020.
The lawyer said that the main assets of the companies were sums owed by other companies in the Arcadia group, but because there was an ongoing insolvency process, the likelihood of realizing those debts between groups was limited.
The companies also disputed the scope of a lawsuit received from the pension plan’s trustees, the court was informed.
Judge Quinn said he was satisfied with appointing the joint provisional liquidators and returned the petition to Dec. 21.
The appointment of interim liquidators was said to facilitate the disposal of Irish assets and potentially preserve employment, the judge noted.
He said a “particular feature” of this app was the hope that a UK transaction would preserve business and jobs, but if that doesn’t happen, running stores during the winter months would be a better option. for employees and creditors. .
The appointment would facilitate the reopening of stores here on Tuesday, he added.
No layoffs
Philip Green’s Arcadia group owns the Topshop, Topman, Dorothy Perkins, Wallis, Miss Selfridge, Evans, Burton and Outfit brands, and they are marketed at 444 leased sites in the UK and 22 overseas.
In the UK, Deloitte said stores would remain open or reopen when government Covid-19 restrictions allowed, and no layoffs were immediately announced.
“We will now work with the existing management team and broader stakeholders to assess all of the options available for the future of the group’s businesses,” said Matt Smith, joint administrator of Deloitte.
He said Deloitte would quickly seek expressions of interest and hoped to identify one or more buyers to secure the future of the business.
“This is an incredibly sad day for all of our colleagues, as well as our suppliers and many other stakeholders,” said Arcadia CEO Ian Grabiner.
He blamed the pandemic for the group’s disappearance. “In the face of the toughest business conditions we have ever experienced, the obstacles we encountered were too severe.”
Arcadia has turned down rival Frasers Group’s offer of a loan of up to £ 50 million, sportswear retailer Frasers, controlled by Mike Ashley, said on Monday.
“The Frasers Group was given no reason for the rejection [of the loan] neither did the Frasers Group have any commitment from Arcadia before the loan was declined, ”said Frasers.
Arcadia had declined to comment.
Earlier Monday, Frasers said that should Arcadia Group go into management, it would be interested in participating in any sales process. – additional copy: Reuters
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