The retail empire of tycoon Philip Green, which owns well-known British fashion chains like Topshop, appears to be on the brink of collapse following the economic shock of the coronavirus pandemic.
Like other big names, Arcadia’s brands, which employ some 15,000 people and include Burton, Miss Selfridge and Dorothy Perkins, have suffered during the pandemic and associated restrictions across the UK.
The rattle comes after the struggling retailer closed the doors of its last Australian store in March this year, eliminating all local jobs.
Competition has increased from low-cost rivals like Primark, as well as online disruptors like ASOS and Boohoo.
Critics have also said that the 68-year-old Green, who has been embroiled in a number of controversies in recent years, has not invested enough in businesses to get them fit to face new competition in retail. .
In a statement, the group sought to blame the virus for its problems. He said that “the forced closure of our stores for extended periods as a result of the COVID-19 pandemic has had a material impact on commerce in all of our businesses.”
However, he stressed that its brands “continue to be marketed” and that its stores will open again in England as soon as coronavirus restrictions are lifted next week.
England is in a four-week lockdown that has forced the closure of all stores that sell items deemed non-essential.
The closure expires on December 2 and stores will be able to reopen. The other nations of the UK, Scotland, Wales and Northern Ireland, have taken slightly different approaches, but all have reimposed restrictions in various stages that closed non-essential stores.
Arcadia has reportedly been in emergency talks with lenders in an attempt to obtain a $ 54 million loan.
If you enter the so-called administration as early as next week, there will likely be a fight between creditors to gain control of the company’s assets.
It is the latest retailer to have been hit by store closures during the pandemic, with rivals in Britain including Debenhams, Edinburgh Woolen Mill Group and Oasis Warehouse all falling into insolvency.
On Friday, menswear retailer Moss Bros also launched insolvency proceedings to lower its rental costs and protect itself for the future.
In addition to being affected by the closures, the company has suffered wedding cancellations and a decline in demand for office wear. It operates 128 stores and employs about 800 people.
For the past two decades, Green has been one of the most influential executives in European retail. He bought Arcadia in 2002 and subsequently came close to taking over Marks & Spencer as well.
Her no-nonsense attitude won her admirers and helped her brands bond with people like supermodel Kate Moss and singer Beyonce.
But a series of scandals in recent years tarnished his reputation and led to calls to strip him of the knighthood awarded to him by Queen Elizabeth II in 2006.
For many, his high salary came to symbolize the excesses of the corporate world, especially when their brands needed investment. And a slow response to consumers’ shift to online shopping meant that brands couldn’t keep up.
It was after the 2008 global financial crisis that the underlying problems with his businesses really began to show themselves, especially after his decision to sell BHS, a fixture on British streets for decades, for just £ 1 to struggling businessman Dominic Chappell. .
About a year later, BHS collapsed, costing 11,000 people their jobs and leaving a pension deficit of about $ 1 billion. Although Green subsequently paid hundreds of millions to the pension, his reputation never recovered.
Victims of the Australian Retail Crisis
Meanwhile, Chappell was sentenced this month to six years in jail for tax evasion during his time at BHS.