One of the UK’s biggest fashion giants broke into administration tonight (Monday).
Aracadia, famous for brands like Topshop, Topman, Dorothy Perkins, Burton, and Wallis, was on the verge of collapse over the weekend, putting 13,000 jobs at risk.
This has now been confirmed in a statement by administrators Deloitte.
“No layoffs will be announced today due to the appointment and business will continue to act,” they said.
“The joint administrators check all options that are available to the group.
“The administrators will honor all online orders placed over the Black Friday weekend and continue to operate all of the store’s existing sales channels.”
The group, which Sir Philip Green acquired in 2002 for £ 850 million, has been trying to find extra money for a few weeks now.
But despite the pandemic that has been blamed for the deficit, a business-saving £ 30m emergency loan was not provided last week.
The fashion retail empire has 444 stores in the UK and 22 overseas. 9,294 employees are currently on vacation.
Ian Grabiner, General Manager 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 effects of the Covid-19 pandemic, including the forced closure of our stores for an extended period of time, have severely affected trade in all of our brands.
“During this immensely challenging time, our priority has been to protect jobs and maintain the group’s financial stability in the hope that we can overcome the pandemic and fight on the other side.
“Ultimately, given the toughest trading conditions we’ve ever seen, the obstacles we encountered were far too severe.”
Matt Smith, Joint Administrator at Deloitte, said, “We will now work with the existing management team and broader stakeholders to evaluate all options that are available for the future of the group’s companies.
“We intend to continue trading all brands and look forward to welcoming customers back to stores when many of them are allowed to reopen.
“We will look for expressions of interest quickly and expect to identify one or more buyers to ensure the companies’ future success.
“As administrators, we would like to thank all of the Group’s employees, customers, and business partners for their support. We appreciate this is a difficult time.”
Just last year, 50 branches were closed and 1,000 jobs were cut as part of a restructuring deal. However, these savings should prove insufficient.
The mirror reports Arcadia is expected to enter the “light-touch” trade administration. This means that management remains in control of day-to-day business operations while administrators look for a buyer for all or part of the company.
Earlier Monday, Mike Ashley’s Frasers Group announced that an offer for a £ 50 million lifeline for Arcadia had been rejected.
It came when MPs called on Sir Philip to fill a shortage in the pension system and asked the pension guard to fight on behalf of the group’s workers.
Stephen Timms, chairman of the labor and pensions committee, called on the tycoon to raise funds to fill the pensions black hole, which is valued at £ 350 million.
It is the youngest retailer to suffer from store closings during the coronavirus pandemic. Competitors like Debenhams, Edinburgh Woolen Mill Group and Oasis Warehouse have gone into bankruptcy since the lockdown measures were introduced in March.
Earlier this year, the group announced plans to cut around 500 of their 2,500 jobs at headquarters as part of a restructuring in light of the coronavirus crisis.
Frasers Group, which operates Sports Direct, told the London Stock Exchange on Monday that a £ 50 million loan was turned down to help keep Arcadia afloat.
The company said: “Frasers Group can confirm that Arcadia Group Limited has rejected the Frasers Group’s offer to raise a rescue line loan of up to £ 50 million.
“Frasers Group did not receive any denial reasons, nor did Frasers Group have any commitment from Arcadia before the loan was denied.”