Sir Philip Green’s Arcadia group goes into administration with 13,000 jobs on the line

Sir Philip Green’s Arcadia retail empire has fallen into administration with 13,000 jobs and hundreds of stores at risk, making the Topshop owner Britain’s biggest corporate failure of the coronavirus pandemic to date. 

The group, which is comprised of eight of the UK’s best known high-street and fashion retail brands, will be administered by Deloitte. No redundancies are being announced immediately and stores will continue to trade. 

Arcadia is the latest retailer to have been hammered by store closures during the pandemic, with rivals including Debenhams, Edinburgh Woollen Mill Group and Oasis Warehouse all sliding into insolvency since March. 

Earlier this year, the group revealed plans to cut around 500 of its 2,500 head office jobs amid a restructure in the face of the coronavirus crisis. A £50million offer by Mike Ashley’s Frasers Group was rejected today, as MPs urged Sir Philip to ‘do the right thing’ and protect the pensions of thousands of Arcadia employees.

In a statement, Ian Grabiner, chief executive of Arcadia, said: ‘This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders.’

He added: ‘Our stores will remain open or reopen when permitted under the Government Covid-19 restrictions, our online platforms will be fully operational and supplies to all of our partners will continue.’     

Frasers Group, which runs Sports Direct, told the London Stock Exchange earlier on Monday that a £50million loan aimed at keeping Arcadia afloat had been rejected. 

The company said: ‘Frasers Group can confirm that Arcadia Group Limited have declined Frasers Group’s offer of a lifeline loan of up to £50million.Frasers Group were not given any reasons for the rejection, nor did Frasers Group have any engagement from Arcadia before the loan was declined.’ 

A statement from administrators Deloitte said: ‘No redundancies are being announced today as a result of the appointment and stores will continue to trade.The Joint Administrators are assessing all options available to the Group. The administrators will be honouring all online orders made over the Black Friday weekend and will continue to be operating all the existing sale channels of the business.’     

Matt Smith, joint administrator at Deloitte, said: ‘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.We will be rapidly seeking expressions of interest and expect to identify one or more buyers to ensure the future success of the businesses.’  

Retail trade union Usdaw said it will seek an urgent meeting with Arcadia’s administrators in an attempt to save jobs and ensure staff are treated fairly.

Sir Philip Green's Arcadia retail empire has fallen into administration with 13,000 jobs and hundreds of stores at risk. Pictured on his £100million yacht in Monaco

Sir Philip Green's Arcadia retail empire has fallen into administration with 13,000 jobs and hundreds of stores at risk. Pictured on his £100million yacht in Monaco

Sir Philip Green’s Arcadia retail empire has fallen into administration with 13,000 jobs and hundreds of stores at risk. Pictured on his £100million yacht in Monaco

Sir Philip Green's Arcadia group, which includes Topshop, entered into administration today

Sir Philip Green's Arcadia group, which includes Topshop, entered into administration today

Sir Philip Green’s Arcadia group, which includes Topshop, entered into administration today

The group behind major high street brands including Topshop, Burton and Dorothy Perkins (pictured) could collapse within hours - with 13,000 staff facing losing their job

The group behind major high street brands including Topshop, Burton and Dorothy Perkins (pictured) could collapse within hours - with 13,000 staff facing losing their job

The group behind high street brands Topshop and Dorothy Perkins (pictured) has collapsed

Meanwhile former city minister Baron Paul Myners today slammed Sir Philip in an interview with BBC Radio 4's Today Programme

Meanwhile former city minister Baron Paul Myners today slammed Sir Philip in an interview with BBC Radio 4's Today Programme

The collapse of Arcadia is the biggest UK corporate failure of the pandemic to date 

Usdaw national officer Dave Gill said: ‘Now that Arcadia is in administration it is crucial that the voice of staff is heard over the future of the business and that is best done through their trade union.

‘We are seeking urgent meetings and need assurances on what efforts are being made to save jobs, the plan for stores to continue trading and the funding of the pension scheme. In the meantime we are providing our members with the support and advice they need at this very difficult time.

‘Over 200,000 retail job losses and 20,000 store closures this year are absolutely devastating and lay bare the scale of the challenge the industry faces. Each one of those job losses is a personal tragedy for the individual worker and store closures are scarring our high streets and communities.

‘What retail needs is a joined up strategy of unions, employers and Government working together to develop a recovery plan. Usdaw has long called for an industrial strategy for retail, as part of our ‘Save our Shops’ campaign, to help a sector that was already struggling before the coronavirus emergency.

‘There are substantial issues that need to be addressed likes rents, rates and taxation, to create a level playing field between high streets and online retail. Those issues will not be resolved with ‘sticking plaster’ measures like today’s 24-hour opening Government announcement.

‘Retail is crucial to our town and city centres, it employs around three million people across the UK. The Government must take this seriously; we need a recovery plan to get the industry back on its feet.’ 

It comes after Stephen Timms, the head of the Work and Pensions Committee, called on Sir Philip to stump up funds as he urged the Pensions Regulator watchdog to protect pension scheme members.

He also asked about the status of a £385million package that was agreed between the regulator, Arcadia and the group’s owner last year. He said: ‘There is unquestionably a moral case for the Green family to do the right thing and guarantee Arcadia’s hardworking staff what is rightfully theirs, whatever happens this Christmas.

‘But the Pensions Regulator must also ensure that it is doing everything in its power to fight the corner of the pension scheme members.This is a crucial moment for the regulator to show that it has learned the lessons of previous corporate collapses, such as those of BHS and British Steel.’ 

Former city minister and ex-Marks and Spencer chief Lord Paul Myners also called on Sir Philip to look after his former employees. He also labelled Sir Philip as, ‘probably the rudest businessman’ he had ever met and described him as ‘not a retailer’ but an ‘asset stripper’.  

Stephen Timms, the head of the work and pensions committee (left), said: 'There is unquestionably a moral case for the Green family to do the right thing and guarantee Arcadia's hardworking staff what is rightfully theirs, whatever happens'

Stephen Timms, the head of the work and pensions committee (left), said: 'There is unquestionably a moral case for the Green family to do the right thing and guarantee Arcadia's hardworking staff what is rightfully theirs, whatever happens'

Stephen Timms, the head of the work and pensions committee (left), said: ‘There is unquestionably a moral case for the Green family to do the right thing and guarantee Arcadia’s hardworking staff what is rightfully theirs, whatever happens’

Former city minister and ex-Marks and Spencer's chief, Lord Paul Myners (pictured) said Sir Philip must look after his former employees

Former city minister and ex-Marks and Spencer's chief, Lord Paul Myners (pictured) said Sir Philip must look after his former employees

It comes as Sir Philip's Arcadia group, behind high street brands such as Topshop, Burton and Dorothy Perkins, plunged into administration

It comes as Sir Philip's Arcadia group, behind high street brands such as Topshop, Burton and Dorothy Perkins, plunged into administration

Former city minister and ex-Marks and Spencer’s chief Lord Paul Myners (left) said Sir Philip must look after his ex-employees

M&S directors discuss possibility of buying menswear brand Austin Reed alongside its sister label Jaeger 

Marks & Spencer directors have met in recent days to discuss the possibility of buying menswear brand Austin Reed alongside its sister label Jaeger, The Mail on Sunday can reveal.

The discussion is understood to have included buying wedding and occasionwear brand Jacques Vert. All three are part of the former Edinburgh Woollen Mill empire of retail mogul Philip Day.

At the front of the queue: Marks & Spencer is understood to be in 'pole position' to buy Austin Reed, Jaeger and Jacques Vert

At the front of the queue: Marks & Spencer is understood to be in 'pole position' to buy Austin Reed, Jaeger and Jacques Vert

At the front of the queue: Marks & Spencer is understood to be in ‘pole position’ to buy Austin Reed, Jaeger and Jacques Vert

The group, which also housed Peacocks and Ponden Home, collapsed as high streets were hit with painful lockdown measures earlier this month with just weeks to go before Christmas.

Marks & Spencer is understood to be in ‘pole position’ to buy the three brands, which it would operate as a subsidiary company with separate design teams if successful, according to City sources.

Next and sportswear mogul Mike Ashley have also been named as possible buyers.

City sources also last night speculated that Marks & Spencer may examine a bid for some of Sir Philip Green’s Arcadia Group brands. It is expected to appoint administrators this week.

One City source endorsed a possible M&S acquisition of Topshop as ‘a great idea’.

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Speaking in an interview on BBC Radio 4’s Today Programme, he said: ‘Sir Philip Green never really expected the opportunity or or the challenge of online trading. He never really made any investment in that area at all.

‘The truth is Philip Green is not a retailer. He’s a man whose place is within property and leverage. He’s what we could have called in the 1970’s ‘an asset stripper’.

‘He doesn’t invest in his business, he milks them. He takes out large rents and huge dividends rather than invest them.

He added: ‘Covid has obviously been a significant factor, but the truth is that this group of brands has been haemorrhaging for 15 years.

‘It has been under-invested, it’s been losing market share, it’s become an insignificance.’  

Asked about his opinion on Sir Philip, he said: ‘He’s probably the rudest most foul-mouthed person I’ve ever met in business. He was a memorable man for that if nothing else.’

But asked if he liked him he said: ‘I did actually. There is an element of Philip you couldn’t but enjoy, he had a very sharp brain.’ 

However he also criticised Sir Philip for ‘failing to put enough money into the pension funds’, but praised that he had previously ‘stepped up’ when in a similar situation with BHS.  

In 2016, Sir Philip sold BHS, which had a pension deficit of £571million, for £1 to Dominic Chappell.

Sir Philip later agreed to pay £353million to support the scheme amid pressure from the pensions regulator.   

In a dramatic intervention on Saturday, Sports Direct and House of Fraser owner Mr Ashley offered an ’emergency loan’ to tide Arcadia over until Christmas.

However, his offer has been angrily dismissed as a ‘publicity stunt’ by sources close to Sir Philip – who was yesterday spotted relaxing in Monaco, where he keeps a £100million yacht.

One said: ‘Sir Philip is not keen to jump into bed with a chancer like Mike Ashley.’

Monaco resident Sir Philip, 68, and Mr Ashley – known as ‘Masher’ to his inner circle – are former friends, but tension between the two has grown as their high street rivalry intensified.

The offer of a loan from a major retail rival was described as ‘provocative’ by City sources and is likely to irritate Sir Philip, a flamboyant businessman once branded the ‘King of the High Street’.

Calls to protect pension pots for thousands of workers 

Arcadia’s pension scheme is understood to have a deficit of £350million. Lady Green is due to inject £50 million to revitalise the company and its retirement fund.

As it stands, the group has 10,000 people on its £350m pension scheme and – if the company appoints administrators from Deloitte – the government-run Pension Protection Fund could be forced to step in.

Its intervention could see members lose between a fifth and a quarter of the pension benefits promised under the Arcadia scheme.

The separate Pensions Regulator can force a former owner of a business to help cover costs if it can be proved there has been an attempt to avoid or not honour statutory liabilities. 

Part of the remaining deficit may be secured against Arcadia’s property, such as its huge TopShop store on London’s Oxford Street. 

But with the value of the property portfolio falling in the pandemic it has become more and more difficult for Arcadia to secure loans from its bankers.

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Friends last night said Sir Philip and his family were ‘deeply saddened’ by the demise of Arcadia and one said the loan offer was being dismissed as no more than Mr Ashley ‘having a bit of fun’.

Sir Philip, whose clothing empire also includes Dorothy Perkins, Burton and other brands, has endured a spectacular fall in reputation since selling BHS to serial bankrupt Dominic Chappell for just £1 in 2015. BHS went bust a year later.

Like other retailers, Arcadia has been dealt a devastating blow by the November lockdown, missing out on crucial trade in the run-up to Christmas, and Sir Philip has spent recent weeks unsuccessfully attempting to secure a £30 million loan to keep the business afloat.

The £50million touted by Mr Ashley yesterday is understood to be conditional on Arcadia guaranteeing the money against business assets such as its properties.

But City sources said that this made the loan ‘unworkable’ – and could even unwittingly hand Mr Ashley control of the entire fashion group in the unlikely event it went ahead.

One said Mr Ashley appeared to be ‘playing games’ by offering the loan. 

‘You might as well serve Arcadia and all its companies up on a plate to Mike Ashley,’ an insolvency expert said.

Mr Ashley has previously made a similar offer to the ailing Debenhams department store business.

Mr Ashley’s finance director spoke publicly yesterday via Sky News to make the offer to Sir Philip, which he said needed one of his directors to ‘contact us today to discuss how we can support them and help save as many jobs as possible’. 

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