Administrator Deloitte made the grim announcement days after reports suggested the group was on the brink of appointing administrators. The tycoon’s Arcadia Group owns Topshop, Topman, Dorothy Perkins, Wallis, Miss Selfridge, Evans, Burton and Outfit brands. No redundancies are being announced immediately as a result of the appointment of administrators and stores will continue to trade.
Sir Philip’s fashion empire runs 444 shops in the UK and 22 overseas.
Arcadia said 9,294 employees are currently on furlough.
The group’s CEO blamed the COVID-19 crisis for its demise.
Ian Grabiner said Arcadia had been “severely impacted” by the coronavirus crisis.
Arcadia, owned by Sir Philip Green, has collapsed into administration, putting 13,000 jobs at risk
Billionaire Sir Philip Green owns the Arcadia Group
He 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 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.”
Deloitte said Arcadia had been ‘severely impacted’ by the Covid crisis
The announcement came hours after Mike Ashley’s Frasers Group said an offer for a £50 million lifeline for Arcadia was rejected.
In a statement, Matt Smith, joint administrator at Deloitte, said the company would work with Arcadia’s management and stakeholders “to assess all options available for the future of the group’s businesses”.
He said it was Deloitte’s 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.”
Arcadia will continue to honour all online orders made over the Black Friday weekend and will continue to operate all of its current sales channels.
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Sir Philip’s Arcadia Group includes Topshop, Topman, Dorothy Perkins and Miss Selfridge
The collapse of Arcadia puts 13,000 jobs at risk
He added: “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.”
Sir Philip was once known as the “King of the High Street” due to his ownership of such huge chains.
Forbes estimated his worth to be £1.2 billion in 2020.
Simon Underwood, business recovery partner at accountancy firm Menzies LLP, said the collapse of Arcadia should serve as a reminder to other high street retailers about the change in consumer habits during the pandemic.
He said: “While many areas of the UK business landscape are emerging from this lockdown with cautious optimism, the outlook for some retailers is still gloomy, and the Black Friday effect may not be enough to prevent further collapses this side of Christmas.
“This latest high street casualty should hammer home that e-commerce is now consumers’ go-to shopping experience, and retailers
Sir Philip with models at Topshop’s show at London Fashion Week in 2014
Adam French, a consumer expert at Which?, said anyone who has vouchers for high street stores should spend them as soon as they can.
He said the collapse of the string of Arcadia brands into administration serves as “yet another serious blow for the high street in what has been a torrid year for retail”.
Mr French added: “We would advise any consumers who have vouchers to think about spending them as soon as they can.”