Sir Philip Green’s TopShop empire Arcadia Group ‘faces collapse within days’

Sir Philip Green’s Arcadia Group empire which owns high street labels such as Topshop, Burton and Dorothy Perkins could face collapse within a matter of days – putting 15,000 jobs at risk.

In what could be the biggest British corporate collapse of the coronavirus pandemic so far, the group is set to appoint administrators from Deloitte as early as Monday next week although the plans could still be delayed.

The move, which is said to have followed Sir Philip being unable to secure an emergency £30million loan to keep the retail giant afloat, puts its 15,000 staff at risk of redundancy, after it axed 500 roles in its head office in July.

The businessman, who bought the London-based high street group for £850million in 2002, had asked lenders for support after lockdown restrictions hammered sales, disrupting crucial trading in the run up to Christmas. 

There is expected to be a rush among creditors to secure the company’s assets if the Arcadia Group’s insolvency is formally declared. Sources close to the process confirmed the reports by Sky News to the PA news agency. 

Sir Philip Green, pictured in Monaco on Tuesday, is said to have been unable to secure an emergency £30million loan

Sir Philip with (from left) Alexa Chung, Pixie Geldof, Kendall Jenner, Cara Delevingne and Jourdan Dunn in London in 2015

The firm said it had been working on ‘contingency options’ to secure the group’s future, and that it expected its stores to reopen next week when the UK Government’s latest four-week lockdown ends.

England is in the midst of a lockdown due to the pandemic that has forced the closure of all shops selling items deemed to be non-essential. The lockdown expires next Wednesday and shops will be allowed to reopen. 

A spokesman also admitted that the ‘forced closure of our stores for sustained periods as a result of the Covid-19 pandemic has had a material impact on trading across our businesses.’ 

The statement added: ‘The brands continue to trade and our stores will be opening again in England and ROI as soon as the Government COVID-19 restrictions are lifted next week.’

The Topshop store on Oxford Street in London’s West End is closed this morning on what is Black Friday despite the lockdown

Arcadia owns the Topshop, Topman, Dorothy Perkins, Wallis, Miss Selfridge, Evans and Burton brands, trading from over 500 stores up and down the country.

Greg Lawless, equity analyst at Shore Capital, told Sky News: ‘The Arcadia stable has been bleeding for years.  

‘It has lost market share to Primark, it has lost market share to the online boys in Boohoo and Asos and it is an underinvested estate. Lockdown too has possibly been the nail in the coffin to the business.’

Russ Mould, investment director of AJ Bell, said: ‘It has underinvested in the online shift and it does have that horribly big pension deficit which has been weighing it down for some considerable period of time and limiting its room for financial manoeuvre.’

Dorothy Perkins and Burton (file picture) are among the other high street fashion brands owned by Arcadia Group

He added: ‘Although Topshop is probably just about holding its own the other brands like Dorothy Perkins and Miss Selfridge, I don’t think they have been making money for a very, very long period of time.

‘They really suffered when some of their big concession sites like Debenhams and the big department stores began to go.

‘Again, a combination of events have caught up with Arcadia and it’s been a classic example of how to firms fail first slowly and then ultimately very quickly.’

Asked if this was the end of Sir Philip, he said: ‘I think that’s probably right, I know with a lot of people he’s persona non grata anyway and when you get comedians satirising you in films you probably know your time is fairly close to being up, anyway.’

Sir Philip’s £100million super yacht Lionheart was docked in Monaco earlier this week as the England lockdown continues

Online retailer Boohoo is among a number of businesses expected to consider taking on Topshop should it appoint administrators next week as reported.

Other brands could be saved by investors or become online-only fashion labels, like Cath Kidston, Oasis and Warehouse. It is understood Sir Philip is unlikely to attempt to repurchase any of Arcadia’s trading operations.

It was reported earlier this month that Arcadia was drawing up plans for administration, but a spokesman for the retail group denied this was the case.

He added the firm was ‘taking all appropriate steps’ to protect itself from the pandemic’s impact.

The Arcadia Group is the latest retailer to have been hammered by the closure of stores in the face of coronavirus, with rivals including Debenhams and Edinburgh Woollen Mill Group all sliding into insolvency since the pandemic struck in March.

Even before the pandemic, bricks and mortar clothing retail in Britain was facing a major structural challenge with the economics of operating stores on traditional leases proving increasingly difficult.

Peacocks and Jaeger fell into administration last week, following that of Oasis, Warehouse and Laura Ashley earlier this year. 

The group has more than 500 retail stores across the UK, with the majority of these currently shut as a result of England’s second national lockdown, which will end next week.