Arcadia Group was trying to raise £ 30 million ($ 40 million) to avoid bankruptcy and cover losses caused by the pandemic. However, on Monday it became known that the negotiations were unsuccessful, reports The New York Times. As a result of bankruptcy, 9,294 thousand employees of the company may lose their jobs. No layoffs have been reported yet. External management of the Arcadia Group was transferred to the auditor Deloitte.
“This is an extremely sad day for all our colleagues, suppliers and many partners. The fallout from the COVID-19 pandemic, including our extended store closures, has had a profound impact on the sales of all of our brands. Throughout this extremely challenging period, our priority has been to preserve the jobs and financial stability of the group in the hope that we can weather the pandemic. Ultimately, the obstacles we faced were too great,”said CEO Ian Grabiner.
According to him, trade will continue during the bankruptcy process, and the group's stores will open from December 2, after the lifting of the nationwide quarantine in England.
On Friday, November 27, Arcadia Group acknowledged the "material impact" of restrictive measures related to the spread of the coronavirus. According to Springboard analysts, in November, when some stores in England again closed, the traffic of shopping centers fell by 60% compared to 2019. Online sales as a whole are up 45% since February, while apparel demand (both offline and online) has dropped 14%, adds the UK's National Statistics Office.
In 2019, the Arcadia Group, which owns the Topshop, Topman, Burton and Dorothy Perkins brands, entered into a voluntary agreement with lenders, closing more than 80 stores in Europe and renegotiating the leases of the remaining premises. The company filed for bankruptcy in the United States and closed all stores in the country. The Arcadia Group currently has 444 stores in the UK and 22 overseas.
The fall of the Arcadia Group has renewed the career track of Sir Philip Green, who has recently been the target of allegations of racial discrimination and sexual harassment. Green lives in Monaco, spends most of the time on his 90m yacht and flies to London on a private jet.
In 2006, Philip Green received a knighthood for his company's contributions to the UK retail industry. However, the billionaire's reputation was hit hard when he sold British Home Stores (BHS) for £ 1 in 2015, after which the country's second largest retailer went bankrupt with a £ 571m pension fund shortfall. Parliament, and in 2017 Green agreed to contribute £ 363 million to the BHS fund.
According to Forbes, the fortune of Philip Green and his wife Christina is $ 2.3 billion (£ 1.7 billion). The Times estimates Green's fortune at $ 1.3 billion (£ 930 million).>