TOPSHOP owner Arcadia has gone into administration putting more than 13,000 jobs at risk – but which retailers does it affect?
The retail giant's failure to stay afloat affects all of its brands and is a great blow to the British high street.
The fashion empire, which is owned by Sir Philip Green, hired administrators from Deloitte, blaming the coronavirus pandemic for "severely" impacting sales across its brands.
Ian Grabiner, CEO of Arcadia, said it had hoped to "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," he said.
Arcadia operates 444 stores in the UK and 22 shops internationally, and employs 19,000 workers globally.
There are 9,294 members of staff in the UK currently on furlough.
Here, we take you through which retailers are affected and what going into administration actually means for Arcadia.
What shops are in Arcadia Group?
Fashion brand Arcadia owns seven different high street retailers. All of them are now at risk of going bust.
These are the shops that Arcadia Group currently owns:
- Dorothy Perkins
- Miss Selfridge
- Wallis and Evans
Over the years, Arcadia Group has bought an sold other British high street brands. These are the ones it used to own:
- Debenhams – Formed a separate company in 1998
- Etham and Tammy – Shops were closed shortly after being purchased in 2005
- Hawkshead – Sold to Rubicon Retail in c.2002
- Innovations – Sold to GUS in 1997
- Peter Robinson – Converted into TopShop in 1964
- Principles – Sold to Rubicon Retail in c.2002
- Principles for Men – Closed in c.2000
- Racing Green – Sold to Rubicon Retail in c.2002
- Richards – Closed shortly after purchasing in 1999
- SU214 – Closed in c.2000
- Wade Smith – Sold in c.2002
- BHS – Sold to Retail Acquisitions Ltd in 2015
- Warehouse – sold to Rubicon Retail in c.2002
What does administration mean for Arcadia?
Stores and the online business will continue to trade as normal, the group said last night.
All of Arcadia's shops currently closed in England due to Covid-19 lockdown restrictions will reopen as planned when rules are eased later this week.
No redundancies are being announced so staff should continue going to work as normal.
What does it mean when a company goes into administration?
ADMINISTRATION is when all control of a company is passed to an appointed to a licensed insolvency practitioner.
It doesn’t necessarily mean the end of the business.
Instead, administrators will try to help a company find ways to repay debts or solve its cashflow problems.
Administration can last anywhere from a few weeks to up to a year or more.
But if the administration process can't rescue the company or find a new owner, this can lead to liquidation.
Liquidation is the process of selling all assets and then dissolving the company completely.
Administration doesn't mean a company has collapsed – at the moment it is looking at ways for the business to survive, such as reducing overheads and selling brands.
Matt Smith, joint administrator at Deloitte, said they would "assess all options available for the future of the group's businesses".
Sir Philip is believed to be unlikely to buy back any of Arcadia’s business from administrators.
The group said there has been a lot of interest from potential buyers overnight, although we're unlikely to know who they are.
This is because big commercial decisions like these are often kept under wraps until the last minute.
Online retailers Boohoo.com and Missguided.com are tipped to be interested in buying Topshop, although neither brand has confirmed speculation.
Sir Philip said the group had rejected a "rescue bid" from billionaire Mike Ashley, owner of rival retail group Fraser Group Plc, slamming it a "publicity stunt".
Sports Direct boss Ashley said he would offer a £50million “lifeline” to keep Green’s Arcadia Group out of administration.
Who is Sir Philip Green and why is he controversial?
Sir Philip Green bought Arcadia group in 2002 for £850million.
Three years later he paid one of the largest-ever dividends – a massive £1.2billion – to his wife and registered owner, Lady Tina Green.
Only last year Sir Philip's retail empire was saved from the brink of collapse after she agreed to bail him out. The move saw Arcadia shut 48 stores and axe 1,000 jobs.
He came under fire in April 2020 for asking for tax payer help to pay wages during the first months of the coronavirus crisis, with critics demanding the millionaire should instead "sell one his yachts".
During David Cameron’s reign as Prime Minister he helped advise on public sector waste and was seen as a high street magnate.
However, his reputation was first questioned over his decision to sell the department store chain BHS in 2015 for £1 to former racing driver Dominic Chappell.
Failed businessman Mr Chappell had already been declared bankrupt and was recently jailed for tax evasion.
The former king of the high street, Mr Green, was then blasted following the demise of BHS in 2015 over a £571million pensions black hole.
In 2017, the tycoon agreed to pay £363million into a BHS pension fund.
Yesterday, MPs called on Sir Philip to cover £350million pensions blackhole in Arcadia's pension scheme.
Two years ago, he was accused of groping numerous staff and other women.
It led to former MP Frank Field calling for him to be stripped of his knighthood.
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