Deloitte has been appointed as administrator of the Arcadia Group which operates a range of store brands including Dorothy Perkins, Evans, Miss Selfridge Burton, Topman and Topshop. The move had been deemed likely for some time but most had expected that Philip Green would re-invest funds from its parent company Taveta, controlled by his wife, and from earlier dividends taken from from the group. This, some suggested, would be a positive face-saving action following the scandal of Green’s earlier sale of BHS, the ongoing under-investment in the businesses’ pension funds, combined with insensitive and ostentatious displays of wealth in the offshore life enjoyed by the Green family. There are now calls for Green to be stripped of his knighthood which was orchestrated under Tony Blair’s government. MPs and trade union officials are understood to be taking the lead on pressurising the Green family to ‘do the right thing’ to plug an estimated £365m in the Arcadia pension fund.
Meanwhile, Arcadia’s management team will, it is understood, retain the day to day control of the business under light touch trading administration. There are no plans for immediate redundancies and stores in England have re-opened with sales as permitted following an easing of lockdown rules.
Having shuttered around 100 stores earlier this year, the group has 450 remaining standalone stores in the UK plus concessions in department stores including Debenhams, as well as Tesco. It also has 22 stores overseas and sells online. However, its demise has been brought about by the tough competition emanating from pureplay online retailers like Asos and Boohoo who have taken significant sales from Arcadia’s former ‘jewel in the crown’ Topshop which many say has been criminally under-invested in recent years. Like other failing retailers, the group has blamed Covid-19 for its demise but according to market experts the rot set in some years ago when the business failed to recognise the need to focus more effort on and direct more funding into its online capabilities.
Ian Grabiner, CEO, Arcadia said: “This is an incredibly sad day for all of our colleague 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 prioty 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.”
Buyers for the Topshop brands will likely emerge over the coming weeks and are expected to include Frasers and Boohoo.
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