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Sir Philip Green’s Arcadia Group falls into administration, putting 13,000 jobs at risk

Anthony France and Daniel O'Mahony
·4-min read
Sir Philip Green: has gone from 'King of the High Street' to the 'unacceptable face of capitalism' (Ian West/PA Wire)
Sir Philip Green: has gone from 'King of the High Street' to the 'unacceptable face of capitalism' (Ian West/PA Wire)

Sir Philip Green’s Arcadia group has fallen into administration, putting 13,000 jobs at risk, administrators confirmed on Monday.

The retail empire, which includes Topshop and Dorothy Perkins, had been teetering on the edge of collapse since the end of last week.

A statement from administrators Deloitte said: “No redundancies are being announced today as a result of the appointment and stores will continue to trade.

“The Joint Administrators are assessing all options available to the Group. The administrators will be honouring all online orders made over the Black Friday weekend and will continue to be operating all the existing sale channels of the business.”

The group, which runs 444 stores in the UK and 22 overseas, said 9,294 employees are currently on furlough.

Ian Grabiner, chief executive of Arcadia, said: “This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders.”

He added: "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 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.”

Earlier today, Mike Ashley’s Frasers Group said an offer for a £50 million lifeline for Arcadia was rejected.

It came as MPs called on Sir Philip to cover a shortfall in the pension scheme and urged the pension watchdog to fight on behalf of the group’s workers.

Stephen Timms, chairman of the Work and Pensions Committee, called on the tycoon to stump up funds to fill the pensions black hole, which is estimated to be as large as £350m.

Matt Smith, joint administrator at Deloitte, said: “We will now work with the existing management team and broader stakeholders to assess all options available for the future of the group’s businesses.

“It is our intention to continue to trade all of the brands, and we look forward to welcoming customers back into stores when many of them are allowed to reopen.

<p>The fallen retail empire includes Topshop and Dorothy Perkins</p>PA

The fallen retail empire includes Topshop and Dorothy Perkins

PA

“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.”

It is the latest retailer to have been hammered by store closures during the coronavirus pandemic. Rivals including Debenhams, Edinburgh Woollen Mill Group and Oasis Warehouse have all slid into insolvency since lockdown measures were first imposed in March.

Earlier this year, the group revealed plans to cut around 500 of its 2,500 head office jobs amid a restructure in the face of the coronavirus crisis.

Frasers Group, which runs Sports Direct, told the London Stock Exchange earlier that a £50m loan aimed at keeping Arcadia afloat had been rejected.

The company said: “Frasers Group can confirm that Arcadia Group Limited have declined Frasers Group’s offer of a lifeline loan of up to £50 million.

“Frasers Group were not given any reasons for the rejection, nor did Frasers Group have any engagement from Arcadia before the loan was declined.”

Retail trade union Usdaw said it will seek an urgent meeting with Arcadia’s administrators in an attempt to save jobs and ensure staff are treated fairly.

Usdaw national officer Dave Gill said: “Now that Arcadia is in administration it is crucial that the voice of staff is heard over the future of the business and that is best done through their trade union.

“We are seeking urgent meetings and need assurances on what efforts are being made to save jobs, the plan for stores to continue trading and the funding of the pension scheme. In the meantime we are providing our members with the support and advice they need at this very difficult time.

“Over 200,000 retail job losses and 20,000 store closures this year are absolutely devastating and lay bare the scale of the challenge the industry faces. Each one of those job losses is a personal tragedy for the individual worker and store closures are scarring our high streets and communities."

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