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Arcadia Group files for bankruptcy

Dec 2, 2020 United Kingdom
Arcadia Group files for bankruptcy
More than 13 000 jobs are at risk in what is so far the biggest UK collapse in the COVID-19 era. The owner of Topshop, Topman, Miss Selfridge, Dorothy Perkins, Evans and Burton appointed administrators from Deloitte on Monday
Arcadia has about 450 directly leased stores in the UK and 22 overseas, as well as dozens more concessions in department stores and other outlets including Tesco. The day-to-day control of the business will remain with Arcadia, the group’s stores and websites will continue to trade and no immediate redundancies are to be made. The move will protect Arcadia from creditors while a buyer is looked for.

The Guardian is citing Ian Grabiner, the Chief Executive of Arcadia: “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.”

Arcadia's entry into administration is the biggest British corporate collapse following the COVID-19 pandemic and will probably mean Sir Philip Green goodbye to the high street as it has been said that he does not plan to bid for any of the assets of the group. 

The consequences of Arcadia falling into administration go beyond the group itself, as this might compromise JD Sports’ saving of department store Debenhams, where Arcadia is a big presence.

Mike Ashley’s Frasers Group, formerly known as Sports Direct, offered Arcadia a 50 million British pounds emergency loan, but that offer was turned down on Monday – READ all about it HERE


The Pension Fund Issue

Besides the jobs at risk, another issue relates to Arcadia’s pension fund, which has an estimated deficit of 350 million British pounds. The pension fund will be assessed for entry into the Pension Protection Fund (PPF) and some MPs and trade unions already called the Green family to fuel the pension fund.

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