Arcadia crashes, Topshop, Burton, Wallis, Dorothy Perkins and Miss Selfridge – plunged into administration. There was no word from Sir Philip Green.
Sir Philip Green’s Arcadia Group has collapsed into administration, putting 13,000 jobs at risk as the retail tycoon’s high street career ends in failure.
There was no word from Sir Philip, who built the retail giant and oversaw it as a director of both Arcadia and its parent firm Taveta Investments.
Arcadia chief executive Ian Grabiner called it “an incredibly sad day”.
Its 444 UK stores, and others abroad, will continue to trade while their future is decided, with jobs safe for now.
Nearly 9,300 of its workforce are currently furloughed due to the coronavirus crisis. Mr Grabiner said it tried to “ride out the pandemic and come out fighting on the other side”.
“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.”
But he said: “Ultimately, in the face of the most difficult trading conditions we’ve ever experienced, the obstacles were too severe.”
But the group is thought to have been struggling before the pandemic, avoiding administration last year.
Deloitte’s Matt Smith said: “We expect to identify buyers to ensure the future success of the businesses.”
The group’s brands had been suffering from years of underinvestment before the Covid pandemic and had failed to keep up with the switch to online selling and digital marketing.
More than 10 buyers are thought to be lining up for Topshop, including online specialist Boohoo, Frasers Group and a number of private equity players.
Industry insiders said big chains including Marks & Spencer and Next, which has been expanding its portfolio of brands as a way to utilise its strong online infrastructure, might also be interested in taking on the fashion brand, which would give it better access to a younger market.
While Ashley has made no secret of his interest in Arcadia, his capacity to take on the business is in doubt. He is also casting an eye over both Debenhams and some brands that formed part of the Edinburgh Woollen Mill Group, while struggling to revive House of Fraser and update his main Sports Direct chain.
Around 10,000 members of Arcadia’s two pension funds risk having their retirement pots cut by up to 20% due to a £350million shortfall.
The tycoon, who with his wife Cristina is estimated by Forbes to be worth £3.8bn is the owner of parent firm Taveta, previously agreed to pay in £50million. She received a record £1.2billion dividend in 2005.
Sir Philip is planning to spend Christmas at a luxury Maldives resort.
Stephen Timms, head of the MPs’ Work and Pensions Committee, called on him to rescue the group’s pensions.
He said: “There is unquestionably a moral case for the Green family to guarantee staff what is rightfully theirs.”
There is also a threat to Debenhams due to its in-store reliance on Arcadia.
BHS collapsed in 2016 after 88 years on the high street – with the failure costing 11,000 jobs and leaving a gaping pension deficit.
BHS, once one of Britain’s best known retailers, was losing £1m a week and had a huge pension deficit when Chappell’s consortium, Retail Acquisitions, bought it in 2015. It was sold by Sir Philip green.
Sir Philip Green was heavily criticised for agreeing to the deal, and later agreed a £363m cash settlement with the Pensions Regulator to plug the gap in the pension scheme.
“The settlement follows lengthy, complex discussions with the Pensions Regulator and the PPF, both of which are satisfied with the solution that has been offered.
“All relevant notices, including legal matters and claims from the regulator, have been withdrawn, bringing this matter to a conclusion.”
The tycoon, who with his wife Cristina is estimated by Forbes to be worth £3.8bn, said: “Once again I would like to apologise to the BHS pensioners for this last year of uncertainty, which was clearly never the intention when the business was sold in March 2015.
“I hope that this solution puts their minds at rest and closes this sorry chapter for them.”