Arcadia: Topshop, Miss Selfridge and Dorothy Perkins at risk
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Topshop, Miss Selfridge and Dorothy Perkins owner Arcadia Group has gone into administration, putting thousands of jobs at risk.
Administration happens when a shop can't pay its debts or borrow any more money, so a special team may be brought in to take over from the management to sort out their money troubles
Ian Grabiner, the boss of Arcadia, said it was an "incredibly sad" day for the group and blamed the coronavirus pandemic for causing money problems.
He said: "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."
Having gone into administration, an outside team of experts will now come in to try and work out a rescue plan to see if any bits of the business can be saved.
If they can't find a way to solve Arcadia's problems, all of their shops could shut down with around 13,000 people in danger of losing their jobs.
Arcadia say no job losses will be announced straight away, and all of their stores will continue to open where coronavirus restrictions allow them to. All orders made during the Black Friday weekend will also be honoured.
When shops are losing money, they may borrow some to pay their bills, hoping to pay it back later when times are better.
If a shop can't pay its debts or borrow any more money, a special team may be brought in to take over from the management and sort out their money troubles - people and companies who are owed money can force this to happen in law.
When this happens we say the shop is "in administration".
It can lead to shops closing down or parts of it being closed and parts being bought or saved.
Even before coronavirus, Arcadia's best-known names were struggling against online-only fashion shops like Asos, Boohoo and Pretty Little Thing.
The company had been hoping to borrow extra cash to help after it lost lots of sales during the coronavirus pandemic.
The company is owned by Sir Philip Green who is a well known businessman.
He had been holding talks with potential lenders for a 拢30m loan but this failed.
Topshop/Topman
Burton
Dorothy Perkins
Miss Selfridge
Evans
Outfit
Wallis
What could the impact be?
The collapse of Arcadia into administration could also have a knock-on effect on the sale of the department store chains like Debenhams.
Debenhams is also facing money problems and following the Arcadia news, it's expected that a rescue deal with JD Sports won't happen now.
That's because a lot of Arcadia brands currently operate inside Debenhams as smaller stores, or concessions.
A concession is where a company rents a space within another store to sell their products and paying that company for the space.
If they close down, it also affects the money the department stores earn, which makes things difficult for them too.
- Published16 January 2013
- Published21 March 2020
