Arcadia falls into administration, putting 13,000 jobs at risk
30 Nov 2020
Sir Philip Green’s Arcadia has become the latest retail casualty of the Covid-19 pandemic after falling into administration on Monday evening and putting some 13,000 jobs at risk.
The group, whose portfolio includes Topshop, Burton and Dorothy Perkins, has appointed administrators from Deloitte after the company’s trading was “severely impacted” by the pandemic.
No redundancies have yet been announced and stores will continue to trade, the company said.
Arcadia operates from approximately 444 leased sites in the UK and 22 overseas. It employs around 13,000 people, 9,294 of which were on furlough at the time of the joint administrators’ appointment.
Administrators said that all online orders made over the Black Friday weekend will be honoured.
Ian Grabiner, CEO of Arcadia, described it as “an incredibly sad day” for the company’s colleagues, suppliers and stakeholders.
He said: “The impact of the Covid-19 pandemic including the forced closure of our stores for prolonged periods has severely impacted on trading across 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 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.
“Our priority now is to work closely with the administrators to deliver the best possible outcome for all our stakeholders, in particular our hard-working employees across the Group. Throughout this process, trading will continue across all of our brands. Our stores will remain open or reopen when permitted under the Government Covid-19 restrictions, our online platforms will be fully operational and supplies to all of our partners will continue.”
Arcadia calls in administrators
Earlier on Monday, Mike Ashley’s Frasers Group confirmed it was interested in some or all of Arcadia’s brands and offered the business a 50 million pound emergency loan to help it avoid administration. The loan was declined, according to Frasers Group.
Online fast-fashion giant Boohoo Group, which has built its success on snapping up smaller or failing companies, is also seen as a potential suitor for some of Arcadia’s brands.
Matt Smith, joint administrator at Deloitte, said: “Arcadia sits at the heart of the high street, and has been striving to combat the impact of Covid-19 throughout this year. Now the effect of the lockdowns, combined with broader challenges facing bricks and mortar retailers, have resulted in a critical funding requirement for the Group and today’s administration.
“We will be rapidly seeking expressions of interest and expect to identify one or more buyers to ensure the future success of the businesses. As Administrators we’d like to thank all of the Group’s employees, customers and business partners for their support, at what we appreciate is a difficult time.”
Photo credit: FashionUnited