Philip Green's retail empire 'could collapse in days' with 15,000 jobs at stake
Philip Green’s retail empire could face collapse “within days,” according to Sky News, with up to 15,000 jobs at stake.
Arcadia, which owns TopShop, Dorothy Perkins, Miss Selfridge, Burton, Wallis and Outfit, is reportedly preparing to call in administrators as soon as next week.
A spokesperson for the company confirmed the business was working on “contingency plans” but did not directly comment on whether it was preparing for administration.
The company has been hit by the coronavirus pandemic and subsequent lockdowns, which have hammered Arcadia’s sales.
Green had been seeking a £30m ($23m) loan to shore up the company earlier this month, but talks with potential lenders are said to have failed.
“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,” a spokesperson for the company said on Friday.
“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 ROI as soon as the Government COVID-19 restrictions are lifted next week.”
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Arcadia, which employs an estimated 15,000 members of staff, has stores open in Scotland, Wales and Northern Ireland but the majority of its outlets are closed in England due to the one-month lockdown measures until 2 December.
READ MORE: Philip Green’s retail empire seeks £30m loan to stay afloat
Earlier this year Arcadia made around 500 head office job cuts — around a fifth of its head office staff — in response to the first lockdown. The company furloughed more than 14,000 workers after the pandemic hit and paused monthly payments to its pension scheme, although these have since resumed.
Before the pandemic ripped into its balance sheet, Arcadia was already struggling with declining footfall, business rates and increased competition from online shopping giants such as Asos (ASC.L) and Boohoo (BOO.L). Over 18 months ago, the company secured a creditors’ approval deal to restructure its finances.
The struggles of recent years come on top of Green’s controversial sale of BHS for £1 shortly before it collapsed, which regulators said had been to avoid liability over its substantial pension deficit. One of Britain’s biggest retail tycoons over the past two decades, his reputation took a battering over the 2015 sale and he was eventually forced to pay out to plug the gap.
One retail industry figure told Sky News’ well-connected city editor Mark Kleinman that Arcadia’s collapse looked inevitable.
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In mid-November, Arcadia denied a report it was about to collapse. A spokesperson said at the time it was “not true” administrators were about to be appointed.
Dave Gill, national officer at shopworkers’ union Usdaw, said it would be a “devastating blow” for Arcadia workers and could not have come at a worse time in the run-up to Christmas.”
“2020 has been a terrible year for the high street, with more than 125,000 retail jobs lost and over 13,000 shops permanently shut,” he said.
“What retail needs is a tripartite approach of unions, employers and government working together to develop a recovery plan. The government needs to level the playing field on taxation between online and the high street, reform business rates that are strangling so many businesses, as well as enabling councils to breathe new life into town centres and make them community hubs.”
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