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Philip Green's retail empire 'could collapse in days' with 15,000 jobs at stake
Tom BelgerFri, 27 November 2020, 6:35 PM SGT
A TopShop store on Regent Street. Photo by Dinendra Haria/SOPA Images/Sipa USA
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.”
Watch: What is the Job Support Scheme and how has it changed?
What is the Job Support Scheme and how has it changed?
The UK's Job Support Scheme is set to replace the furlough programme. Chancellor Rishi Sunak has recent;y announced key changes to the way the new wage subsidy scheme will work. Yahoo Finance UK's Oscar Williams-Grut explains the details.
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.
One retail industry figure told Sky News’ well-connected city editor Mark Kleinman that Arcadia’s collapse looked inevitable.
READ MORE: UK retail footfall plummets further with more job losses on horizon
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.”
WATCH: UK shops set to reopen on 2 December
COVID-19: Lockdown to end next week allowing shops, gyms and salons to reopen - and fans back in some stadiums
England's second national lockdown will be lifted on 2 December when a revised three-tiered system of restrictions will allow shops, gyms and hairdressers to reopen across the country.
Tom BelgerFri, 27 November 2020, 6:35 PM SGT
A TopShop store on Regent Street. Photo by Dinendra Haria/SOPA Images/Sipa USA
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.”
Watch: What is the Job Support Scheme and how has it changed?
What is the Job Support Scheme and how has it changed?
The UK's Job Support Scheme is set to replace the furlough programme. Chancellor Rishi Sunak has recent;y announced key changes to the way the new wage subsidy scheme will work. Yahoo Finance UK's Oscar Williams-Grut explains the details.
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.
One retail industry figure told Sky News’ well-connected city editor Mark Kleinman that Arcadia’s collapse looked inevitable.
READ MORE: UK retail footfall plummets further with more job losses on horizon
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.”
WATCH: UK shops set to reopen on 2 December
COVID-19: Lockdown to end next week allowing shops, gyms and salons to reopen - and fans back in some stadiums
England's second national lockdown will be lifted on 2 December when a revised three-tiered system of restrictions will allow shops, gyms and hairdressers to reopen across the country.
