Topshop owner Arcadia files for bankruptcy

The firm, which additionally owns Miss Selfridge and Dorothy Perkins, has entered administration, which is roughly equal to Chapter 11 bankruptcy safety within the United States, in keeping with an announcement from Deloitte, which is able to oversee the method. Deloitte mentioned no redundancies have been being introduced Monday and shops would proceed to function.

“This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders. 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,” Ian Grabiner, CEO of Arcadia, mentioned within the assertion.

The bankruptcy submitting comes because the UK economic system grapples with a rising unemployment disaster and its worst recession in more than 300 years.
Major clothes retailers, together with Marks & Spencer (MAKSY) and Selfridges, have introduced sweeping job cuts because of the pandemic, which closed shops for months and accelerated a shift to on-line procuring that was already hurting excessive road shops.
Arcadia, which minimize 500 head workplace jobs earlier this 12 months, was struggling even earlier than the pandemic hit. The group narrowly averted bankruptcy in June 2019 after it managed to renegotiate debt repayments and restructure the enterprise. It closed some 50 shops throughout the United Kingdom and Ireland and all 11 of its Topshop and Topman shops within the United States.
Arcadia’s demise will further tarnish the fame of its owner Phillip Green, as soon as deemed one in every of Britain’s most profitable retail entrepreneurs who was knighted in 2006 for companies to the business. A cloud of controversy has surrounded Green in recent times, following the collapse in 2016 of division retailer BHS, which he owned for 15 years earlier than promoting it reportedly for £1 in 2015.
After BHS went bankrupt, UK lawmakers mentioned in a report that Green had weakened the corporate by extracting a whole lot of thousands and thousands of kilos for the advantage of his household, and voted to strip him of his knighthood. Under strain from regulators, Green finally coughed up £363 million ($484 million) to safeguard the pensions of former staff.

Frasers Group, the corporate led by British retail billionaire Mike Ashley that owns manufacturers similar to Sports Direct and Slazenger, mentioned Monday that Arcadia had declined a “lifeline loan” of as much as £50 million ($66.7 million) from the corporate. “Frasers Group were not given any reasons for the rejection, nor did Frasers Group have any engagement from Arcadia before the loan was declined,” it mentioned in an announcement.

According to senior attire analyst at GlobalData, Chloe Collins, Arcadia has “been losing relevance for years,” investing too little in digital choices and dropping market share to on-line rivals similar to Boohoo and Asos (ASOMY). “The best chance for any of its brands is if they are split out,” she advised NCS Business. Boohoo, Next (NXGPY) and Marks & Spencer may very well be amongst potential patrons, Collins added.

Arcadia mentioned Friday it was planning to reopen shops in England and the Republic of Ireland when lockdown restrictions are eased on Wednesday. The firm operates about 550 websites in Britain and Europe, and sells its Topshop Topman manufacturers in Nordstrom shops within the United States.