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Some 13,000 retail jobs are at stake after street giant Arcadia collapsed in administration.
Sir Philip Green’s retail empire operates from 444 sites in the UK and 22 overseas, as well as online, and currently has more than 9,000 employees on leave.
The workforce now faces an uncertain future, although layoffs will not be announced immediately and the business will continue to operate normally, with stores that have been closed due to the latest closure to reopen once restrictions are lifted this week.
Sir Philip Green was honored as King of Main Street
It is the worst business failure of the COVID-19 crisis to date.
Deloitte managers said they would now seek buyers for the business, whose brands, from Topshop and Topman to Dorothy Perkins and Burton, “sit in the heart of High Street.”
Arcadia CEO Ian Grabiner said it was an “incredibly sad day” and that the company had not been able to weather the severe impact of the coronavirus pandemic on commerce.
Sky News exclusively revealed on friday the group was about to enter administration following the failure of talks on a £ 30 million loan to help offset a coronavirus cash bleeding.
Administrators said online orders placed over the Black Friday weekend would be honored.
The collapse has sparked concern about the future of the company’s pension scheme and pressure on Sir Philip to fill a black hole in the fund estimated at £ 350 million.
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Arcadia’s ‘£ 350 million’ pension shortfall in the spotlight
Arcadia’s collapse on Monday night came later turned down a £ 50 million loan offering from Frasers Group, controlled by Sir Philip’s high street rival Mike Ashley.
Labor leader Sir Keir Starmer tweeted: “This is terrible news for thousands of Arcadia employees just before Christmas. Philip Green should do the right thing and cover Arcadia’s pension shortfall.”
Mr. Grabiner, Arcadia CEO, said: “This is an incredibly sad day for all of our colleagues, as well as for our suppliers and many other stakeholders.”
“The impact of the COVID-19 pandemic, including the forced closure of our stores for extended periods, has had a serious impact on the commerce of all of our brands.
“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 can overcome the pandemic and fight on the other side.
“Ultimately, however, in the face of the toughest trading conditions we’ve ever experienced, the hurdles we encountered were too severe.”
The collapse seems to mark a miserable end for Sir Philip brilliant retail career.
Arcadia’s collapse culminates one of the most spectacular implosions in recent corporate history
Once celebrated as King of High Street, he rubbed shoulders with celebrities and was honored by prime ministers.
But the mogul drew criticism after the BHS collapse in 2016, a year after he sold it to serial bankrupt Dominic Chappell for just £ 1.
Last year Sir Philip celebrated a “95th minute” win as Arcadia avoided collapse when creditors agreed to a company voluntary arrangement (CVA), a restructuring that meant the closure of several stores and rent cuts.
Since then, he has faced additional pressure from the pandemic, which has had a devastating impact on thousands of retail jobs, from Marks & Spencer to John Lewis.
Arcadia owns the top brands Topshop and Topman, as well as Dorothy Perkins, Wallis, Miss Selfridge, Evans, Burton and Outfit.
The most valuable brands in the group are Topshop and Topman.
Matt Smith, joint administrator for Deloitte, said: “Arcadia is in the heart of Main Street and has struggled to combat the impact of COVID-19 throughout this year.
“Now, the effect of the lockdowns, combined with the broader challenges facing traditional retailers, has resulted in a critical financing requirement for the group and current management.”
Deloitte said that CVAs of companies within the Arcadia group would come to an end as a result of the administration.
The collapse has prompted questions about a £ 385 million package to complete the group’s pension fund agreed at the time of last year’s restructuring, which includes contributions from Arcadia and Sir Philip’s family.
Stephen Timms, chairman of the Commons Select Committee on Pensions and Labor, has written to the Pensions Regulator, urging it to “fight the corner” of the retirement plan members.
He said: “There is no question that there is a moral argument for the Green family to do the right thing and guarantee Arcadia’s personal worker what is rightfully theirs, no matter what happens this Christmas.”
