Pandemic forces Arcadia into administration

Deloitte has today confirmed that it has been appointed administrator for Sir Philip Green's Arcadia Group retail empire.

The forced closure of its stores as a result of COVID-19 restrictions has had a significant impact on the group, which owns High Street favourites TopShop, TopMan, Dorothy Perkins and Burton.

Deloitte said that no redundancies would be announced today and that stores will continue to trade.

The group employs 13,000 people across the UK and a number of overseas sites , with 9,294 employees currently on furlough.

Any existing company voluntary arrangements will come to an end today, a statement said.

The company said that trading would continue across all of its brands throughout the administration process, adding that stores would remain open or reopen when permitted under the Government COVID-19 restrictions while online platforms will be fully operational and supplies to all of Arcadia's partners will continue.

The confirmation of Arcadia Group's collapse marks a bleak day for the UK High Street, in which beleaguered department store chain Debenhams also filed for administration.

Following reports that Arcadia Group was teetering on the brink over the weekend, Sports Direct owner Mike Ashley confirmed he had made an offer of £50 million of bail out loans to support the business, and it is expected that Ashley will be interested in acquiring assets of some of Arcadia's most iconic brands.

“This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders,” said Ian Grabiner, chief executive of Arcadia. “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."

He said that the Group's priority was now to work closely with the administrators to deliver the best possible outcome for all stakeholders, in particular for employees.

Commenting on the move 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," he added.

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