Sir Philip Green’s Arcadia Group has collapsed into administration, putting 13,000 jobs at risk as the retail tycoon’s high street career ends in failure.
The owner of household names including Topshop, Topman, Miss Selfridge, Dorothy Perkins, Evans and Burton appointed administrators from Deloitte on Monday.
No immediate redundancies were made as a result of the appointment and stores will continue to trade.
The move will protect Arcadia from creditors while a buyer is sought for all or parts of the company. Green, 68, is not expected to bid for any of the assets.
Arcadia’s brands are expected to continue trading in stores and online during the sale process, through a light-touch trading administration, the same process being used by the troubled department store chain Debenhams.
Arcadia’s management will retain control of the day-to-day running of the business during the process, and its shops in England will reopen on 2 December when the coronavirus lockdown is lifted.
The collapse of Arcadia, which has more than 500 stores in the UK, is the biggest British corporate failure of the pandemic and brings to an end Green’s decades-long presence on the British high street.
More than ten buyers are already thought to be lining up for Topshop, including online specialist Boohoo, Mike Ashley’s Frasers Group, formerly known as Sports Direct, and a number of private equity players. Next and Marks & Spencer are also understood to be taking a look at Arcadia’s brands as they try to broaden their appeal online.
The administration also raises concerns for members of Arcadia’s pension fund, which has an estimated deficit of £350m.
The group’s pension fund will be assessed for entry into the Pension Protection Fund (PPF), the industry-backed pensions lifeboat.
However, the move to the PPF could mean members who have not yet reached the scheme’s normal retirement age lose 10% of their benefits, even if they have already started taking the pension.
MPs and trade unions have called on the Green family, who have benefited over the years from huge Arcadia payouts, including a £1.2bn dividend in 2005, to plug the pension fund’s shortfall. The family agreed to put in £100m of additional funds earlier this year as part of a deal with the regulator and signed over security on property assets, but the scheme is still thought likely to be short of funds.