One of the biggest fashion retail giants in the UK has collapsed into administration tonight (Monday).
Famous for brands such as Topshop, Topman, Dorothy Perkins, Burton and Wallis, Aracadia was on the brink of collapse last weekend, putting 13,000 jobs at risk.
Now, in a statement from Deloitte administrators, it has been confirmed.
“No layoffs are announced today as a result of the appointment and stores will continue to trade,” they said.
“The Joint Administrators are examining all options available to the Group.
“The administrators will honor all online orders placed during the Black Friday weekend and will continue to serve all of the company’s existing sales channels.”
The group – acquired by Sir Philip Green for £ 850 million in 2002 – has been trying to find extra money for several weeks.
But despite the pandemic being blamed for the deficit, no £ 30 million emergency loan came out last week.
The fashion retail empire includes 444 stores in the UK and 22 overseas, and there are reportedly 9,294 employees on leave.
Ian Grabiner, CEO of Arcadia, said, “This is an incredibly sad day for all of our colleagues, 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 extended periods, has had a serious impact on the trade of all our brands.
“During this hugely challenging time, our priority was to protect jobs and maintain the group’s financial stability in the hope that we could overcome the pandemic and fight on the other side.
“But in the end, despite the most difficult trading conditions we have ever faced, the obstacles we faced were far too great.”
Matt Smith, joint administrator at Deloitte, said, “We will now work with the existing management team and wider stakeholders to assess all available options for the future of the group’s businesses.
“Our intention is to continue trading all brands, and we look forward to welcoming customers back into stores when many of them reopen.
“We will quickly look for expressions of interest and expect to find one or more buyers to ensure the future success of the businesses.
“As administrators, we would like to thank all of the group’s employees, customers and business partners for their support, in what we value is a difficult time.”
Last year, a restructuring deal saw 50 store closings and 1,000 jobs cut, but these savings turned out to be insufficient.
The Mirror reports Arcadia is expected to enter the “light-touch” commercial administration, meaning management retains full control over day-to-day operations, while administrators seek a buyer for the entire business or for parts of the business.
Earlier on Monday, Mike Ashley’s Frasers Group said a bid for a £ 50 million lifeline for Arcadia was rejected.
It came when MPs called on Sir Philip to cover a deficit in the pension plan and urged the pension watchdog to fight on behalf of the group’s employees.
Stephen Timms, chairman of the Work and Pensions Committee, called on the tycoon to pour in funds to fill the pensions black hole, estimated to be as large as £ 350 million.
It is the latest retailer to be hammered by store closures during the coronavirus pandemic. Rivals including Debenhams, Edinburgh Woolen Mill Group and Oasis Warehouse have all gone out of business since lockdown measures were first imposed in March.
Earlier this year, the group announced plans to cut approximately 500 of its 2,500 headquarters jobs amid restructuring in the face of the coronavirus crisis.
Frasers Group, which runs Sports Direct, told the London Stock Exchange earlier on Monday that a £ 50 million loan to prop up Arcadia had been rejected.
The company said: “Frasers Group can confirm that Arcadia Group Limited has declined Frasers Group’s offer of a lifeline loan of up to £ 50 million.
“Frasers Group was not given any reason for the rejection, nor did Frasers Group have any commitment from Arcadia before the loan was rejected.”