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Topshop owner Arcadia goes bust, with 13,000 jobs at risk
30 November 2020, 20:10 | Updated: 1 December 2020, 06:07
Sir Philip Green's Arcadia Group retail empire collapsed into administration today after failing to secure an emergency loan to keep the business afloat.
The Arcadia Group, which includes brands like Topshop, Miss Selfridge and Burton, had been in emergency talks with lenders in a bid to secure a multi-million pound loan to help shore up its finances.
The emergency loan had been flagged by billionaire Mike Ashley's Frasers Group. The offer from Frasers Group, which runs Sports Direct and House of Fraser, amounts to a £50 million loan, Mr Ashley's company confirmed.
But no agreement was reached and Deloitte is now expected to be appointed as administrators in the coming days.
It means up to 13,000 jobs are at risk.
It is the latest retailer to have been hammered by the closure of stores in the face of coronavirus, with rivals including Debenhams, Edinburgh Woollen Mill Group and Oasis Warehouse all sliding into insolvency since the pandemic struck in March.
The group has more than 500 retail stores across the UK with the majority of these currently shut as a result of England's second national lockdown, which will end next week.
Earlier this year, Arcadia revealed plans to cut around 500 of its 2,500 head office jobs amid a restructure in the face of the coronavirus crisis.
Ian Grabiner, CEO of Arcadia, commented: “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.
"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.”
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 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.
“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.”
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.
"What retail needs is a joined up strategy of unions, employers and Government working together to develop a recovery plan. Usdaw has long called for an industrial strategy for retail, as part of our 'Save our Shops' campaign, to help a sector that was already struggling before the coronavirus emergency.
"There are substantial issues that need to be addressed likes rents, rates and taxation, to create a level playing field between high streets and online retail. Those issues will not be resolved with 'sticking plaster' measures like today's 24-hour opening Government announcement.
"Retail is crucial to our town and city centres, it employs around three million people across the UK. The Government must take this seriously; we need a recovery plan to get the industry back on its feet."