// Sir Philip Green’s Arcadia Group appoints auditing firm Deloitte as administrators
// The move leaves 13,000 jobs hanging in the balance, although no redundancies have been confirmed as yet
// Arcadia Group’s 444 UK stores will continue to trade while administrators seek a buyer
Sir Philip Green’s Arcadia Group has officially entered administration, a move that has put 13,000 jobs at risk.
Last night, the retail empire – which owns Topshop, Topman, Dorothy Perkins, Burton, Wallis, Evans, Miss Selfridge and Outfit – appointed administrators from auditing firm Deloitte after the Covid-19 pandemic “severely impacted” sales across its brands.
No redundancies have been announced yet as a result of the appointment and stores will continue to trade, the administrators said, with many due to reopen on Wednesday when England’s lockdown is lifted.
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Arcadia Group, which runs 444 stores in the UK and 22 overseas, said 9294 employees are currently on furlough – with the majority of those being shop floor staff in England, Northern Ireland and parts of Scotland as they are currently under a second lockdown.
In addition, many of Arcadia Group’s staff worked at its brands’ concessions in Debenhams, which is itself hoping for a rescue deal after sliding into administration earlier this year and is currently in the middle of a sales process.
“This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders,” Arcadia Group chief executive Ian Grabiner said.
“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.”
The administrators said they would be “assessing all options available”, which could see Arcadia Group’s retail fascias sold off in separate rescue deals.
Meanwhile, Arcadia Group said it would continue to honour all online orders made over the Black Friday weekend and will continue to operate all of its current sales channels.
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.
“As administrators we’d like to thank all of the group’s employees, customers and business partners for their support, at what we appreciate is a difficult time.”
Business Secretary Alok Sharma said he would be keeping a “very close eye” on the administrators’ report on director conduct, and pledged the government would support the affected workers.
He tweeted: “Within three months, the administrators have a duty to file a report on director conduct with The Insolvency Service – who will then determine whether a full investigation is required. I will be keeping a very close eye on this process.”
He also said: “This is a deeply challenging time for retailers and we remain fully committed to supporting them, including through an unprecedented package of business support worth £280 billion.”
Retail trade union Usdaw has said it was seeking urgent meetings with Arcadia Group’s administrators in a bid to preserve jobs.
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.”
Earlier on Monday, Mike Ashley’s Frasers Group said an offer for a £50 million lifeline for Arcadia Group was rejected.
It came as MPs called on Green to cover a shortfall in his company’s pension scheme and urged the pension watchdog to fight on behalf of Arcadia Group’s workers.
A spokesman for The Pensions Regulator said: “We are aware of the challenges that the business is currently facing in these unprecedented times and we continue to work with the directors, the trustees and their respective advisers, as well as the [Pension Protection Fund], to protect the position of the Arcadia pension schemes’ members to the fullest extent possible.”
Work and Pensions Committee chairman Stephen Timms urged Green to stump up funds to fill Arcadia Group’s pensions black hole, which is estimated to be as large as £350 million.
Green’s retail empire is the latest industry casualty to have been hammered by store closures during the coronavirus pandemic.
Rivals including Debenhams, Edinburgh Woollen Mill Group and Oasis Warehouse have all slid into insolvency since lockdown measures were first imposed in March.
Earlier this year, Arcadia Group revealed plans to cut around 500 of its 2500 head office jobs amid a restructure in the face of the coronavirus crisis.
Meanwhile in September the former London headquarter for Burton was put up for sale in a bid to seek fresh funds for the company.
In addition, last year Arcadia Group launched seven CVAs which saw it close down a total of 48 stores in the UK and Ireland, as well as all 11 of its Topshop sites the US.
However, Green was only able to secure that CVA after he pledged a package of assets worth more than £400 million to Arcadia Group’s pension scheme.
with PA Wires