This decision makes uncertain the fate of the 13,000 employees and nearly 500 stores of the group, which notably houses the Topshop, Dorothy Perkins and Burton brands.
The outcome seemed inevitable. The British ready-to-wear group Arcadia, known for its Topshop brand, filed for bankruptcy on Monday, swept away by a fall in activity due to the health crisis, announced the firm Deloitte. The group, which is owned by controversial businessman Philip Green, has filed for bankruptcy in the UK and Deloitte has been appointed director, according to a statement.
This decision makes uncertain the fate of these 13,000 employees and nearly 500 stores of the group, which notably houses brands such as Topshop, Dorothy Perkins and Burton. Deloitte specifies that no layoffs are current and that the group’s activity continues, with a reopening of stores this week in England after a one-month closure during the reconfinement. More than 9,000 employees still benefit from partial unemployment. “It’s an incredibly sad day”said Arcadia chief executive Ian Grabiner. “The obstacles we encountered were too severe”, he said, in reference to the loss of activity caused by the pandemic.
An Arcadia bankruptcy represents a bitter failure for its owner, Philip Green, whose career is peppered with several scandals and who failed to negotiate the digital shift in order to modernize a once very popular group.
The Frasers group interested in buying back assets
Shortly before the bankruptcy announcement on Monday, Arcadia turned down an emergency loan offered by the Frasers group of businessman Mike Ashley. The company has given no explanation for its refusal of this loan of 50 million pounds (55 million euros), explained Frasers in a statement. The latter, which owns the sports goods chain Sports Direct and the House of Fraser department stores, announced early Monday morning to offer this loan to Arcadia to allow it to escape bankruptcy. The BBC had indicated that there would be no last-minute bailout and that the Deloitte cabinet would be appointed administrator.
In addition, the Frasers group had specified this Monday morning that if Arcadia were to file for bankruptcy, it would position itself to buy back assets. Mike Ashley is known to have built his retail empire by buying ailing brands that he is trying to turn around through restructuring. Arcadia’s assets could also be of interest to online clothing sales specialists such as the Boohoo group.
It is above all a new thunderclap in British commerce, hit hard by the health crisis and the rise in online shopping. According to figures from the Center for Retail Research, published Monday evening by the Evening Standard daily, British commerce has lost 158,000 jobs since the start of the year, not to mention the bankruptcy of Arcadia. Other bankruptcies have made headlines, with the most recent UK clothing chains Peacocks and Jaeger, which are part of billionaire Philip Day’s EWM group, threatening around 4,700 jobs. The British arm of the Victoria’s Secret lingerie brand and the clothing and home goods chain Laura Ashley are among the other victims of the pandemic.