Arcadia collapse leaves it with £510m pension deficit

Philip Green Arcadia Group administration
Arcadia Group fell into administration last year, putting up to 12,000 jobs at risk at the time
// Arcadia owed creditors £800m when it called in administrators from Deloitte
// Creditors are likely to receive only a small portion of the money owed
// Arcadia Group had a pension deficit of £510m at the time of its collapse

Sir Philip Green’s Arcadia Group reportedly had a pension deficit of £510 million at the time of its collapse in November – which is about £150 million more than expected.

In total, the former parent company of Topshop, Dorothy Perkins, Burton and Miss Selfridge, owed creditors £800 million when it called in administrators from Deloitte.

Arcadia Group fell into administration last year, putting up to 12,000 jobs at risk at the time.


READ MORE:


Asos snapped up Arcadia fascias Topshop, Topman, Miss Selfridge and athleisure brand HIIT for £330 million earlier this month, while Boohoo bought Dorothy Perkins, Wallis and Burton for £25.2 million.

Trade creditors, including fashion and shop fitting suppliers, were owed £163 million and landlords £36.5 million, while tax authorities lost out on £44.2 million, The Guardian reported.

Creditors are likely to receive only a small portion of the money owed.

The Green family’s Aldsworth Equity is set to receive a £50 million payout. The money is owed on an interest-free loan Aldsworth made to the group in 2019 at the time of an emergency restructure.

Trustees of the pension scheme said that they had since received £180 million of funds from the sale of Arcadia assets – up from slightly on last week – as part of £210 million in secured funds agreed under a 2019 deal between the pensions regulator and the Green family.

Earlier this week, it was reported that Topshop and Topman creditors are facing losses of £176 million as Arcadia Group is wound up.

Suppliers based in countries such as China and Turkey and property owners are hit the hardest by the demise of the fashion empire.

Creditors are owed £219 million in total but there are only £42.4 million of assets available to pay them – which means they are likely to miss out on £176 million.

Gift card holders have also been left £4.5 million out of pocket.

Administrators had previously estimated in November that £82.2 million was owed to creditors when Arcadia collapsed.

A spokesman for the Arcadia Pension Schemes said: “The deficit quoted is the difference between the value of the Schemes’ assets and the cost of buying-out all members’ benefits with an insurance company.

“However this value does not take into account the £210 million Security granted to the Schemes as part of the 2019 CVA Settlement and the further recoveries which are expected as part of the administration process.

“The assets forming the Schemes’ Security are being sold as part of the administration process and £180m has already been paid to the Schemes.

“As other assets are realised, the Schemes will receive additional payments, which will further reduce the Schemes’ deficits.”

Click here to sign up to Retail Gazette‘s free daily email newsletter

7 COMMENTS

  1. Arcadia’s HQ was the registered office for numerous companies setup to sell to one another, Arcadia group Brands, A G Clothing to name a few move money around and basically make the money trail almost impossible to follow, but you can bet your life a certain someone won’t be out of pocket! Truly outrageous.

  2. Everyone forgets the thousands smaller contractors from supply chain which are also going to go under on top of the 12 k jobs

    Arcadia owes my small transport business already going under due to non payment, so seeing that Green will leave with a £ 50 mil pay against a loan really angers me …

  3. Any Knight of the realm with a conscience should fall on his sword after giving up his knighthood and paying the bulk of his ill gotten gains to those left high and dry.

  4. He should be stripped of that services for retail title. The guy is an asset stripper in reality that’s all he is. So many companies have gone once he got his grubby fat hands on them.

LEAVE A REPLY

Please enter your comment!
Please enter your name here