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Summary
- Arcadia Group said it was working on several contingency options to safeguard the future of its brands
- Arcadia has been struggling even before the outbreak of the coronavirus, and now the retail firm is seeking financial assistance from its creditors
- Philip Green had been in discussions with many potential investors for securing a loan worth of £30 million in order to support the group’s business
UK retail mogul Philip Green’s fashion conglomerate Arcadia Group said it was working on several contingency options to safeguard the future of the firm after a media report suggested that it is on the verge of collapse.
The group has been struggling even before the pandemic outbreak and now the firm has sought financial assistance from its creditors after months of lockdown and business coming to a complete halt.
Green had been in discussions with many investors for securing a loan worth of £30 million in order to support the group’s business during the Christmas and festive season. However, these talks did not translate into a viable solution for the struggling group putting nearly 13,000 jobs in the company at risk. The company has now appointed administrators who may come next week.
Meanwhile, it is assumed that Green is contemplating a route called light-touch trading administration. This process enables the management of the company to control the daily activities, while the administrators look-out for prospective buyers for all or some departments in the firm.
Arcadia Group’s brands include Miss Selfridge, Dorothy Perkins, Topshop, Wallis, Evans, Outfit and Burton. These brands are facing competition from other low-cost counterparts and also from digital brands like Boohoo and ASOS.
In a statement, the group said that it is likely to open its stores in England and Ireland once the government lifts the Covid-19 restrictions next week.
In the meantime, the industry experts suggested that the group’s brands such as Topman and Topshop could draw the attention of the prospective buyers, but the small brands are not going to be that tempting.
Another industry expert from Retail Economics has reportedly said that the clothing retail business has been impacted badly due to the frequent lockdown, but Arcadia’s collapse can be attributed to the fierce competition in the digital online fashion market, where the group has failed to make a significant presence.
The lack of investment in online platforms has ruthlessly restricted Arcadia’s ability to trade profitably during these tough pandemic times.
Also read: British retail sales drop at the sharpest pace since June
Earlier in July, Arcadia group had announced nearly 500 job cuts at its headquarter after closely averting going into administration in June 2019 through a deal with the creditors, which included nearly 1,000 job cuts and closure of about 50 stores.
