Sir Philip Green’s Arcadia is on the brink of collapse and could call in administrators within days, putting up to 13,000 jobs at risk.
The struggling retail group, which owns brands including Topshop, Dorothy Perkins and Burton, said it was working on contingency options to secure its future.
Sky News reported that Arcadia will appoint Deloitte as soon as Monday after talks with lenders over £30m in emergency funding failed to reach an agreement.
The group has more than 500 sites, many of which are closed under lockdown rules in England which end on 2 December. If the administration is confirmed, stores are expected to continue trading through the Christmas period.
Arcadia dismissed reports of impending insolvency as “speculation”. A spokesperson said: “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 [Republic of Ireland] as soon as the government Covid-19 restrictions are lifted next week.”
Arcadia announced 500 redundancies at its head office earlier this year. In June last year, creditors agreed a rescue deal that included rent reductions on its stores, 1,000 job cuts and dozens of store closures.
In September, Arcadia U-turned on a decision to pay staff as little as half of their redundancy pay. An apology was issued to around 300 people who had lost their jobs while on furlough.
The coronavirus pandemic has deepened the group’s problems, with all non-essential shops closing between March and June, and further lockdown measures in different parts of the UK from September.
Guy Elliott, senior vice president at consultancy Publicis Sapient, said Arcadia’s demise was not surprising after years of underinvestment.
“For the past few years, Arcadia and its brands have failed to be relevant to the demographics targeted by the respective brands, and Topshop in particular has lost much of its appeal to the younger generations,” he said.
“I have no doubt that Topshop will be highly fought over as part of the administration process and hopefully new owners can turn it into the retail giant it once was, with the right investment in product, digital and marketing.”
Rivals including Debenhams, Edinburgh Woollen Mill Group and Oasis Warehouse have all entered insolvency since the pandemic began.
On Friday, fashion chain Jaeger said it will axe 103 jobs and shut 13 stores, a week after falling into administration.
The retailer said it has cut 47 in-store positions and 56 head office and distribution roles as part of a restructuring.
Tony Wright, joint administrator of Jaeger Retail Limited and partner at FRP, said: “We continue to hold discussions with interested parties regarding a possible sale.
“Regretfully, redundancies have been made across a number of head office and store roles.”