SIR Philip Green’s retail empire is facing collapse within hours putting 13,000 jobs at risk, according to reports.
One retail industry figure said Arcadia’s collapse had become inevitable after talks with lenders about an emergency £30million loan had failed.
On Friday, Sky News reported the chain was looking to appoint administrators as soon as Monday (today).
Topshop is currently offering 25% off everything on its website.
Earlier this year, Arcadia warned that it could close 100 of its shops due to coronavirus.
Arcadia’s brands include Evans, Miss Selfridge, Outfit, Topman, and Wallis.
What happens to my Arcadia pension?
IF the business you’re working for goes under, the money can’t be used to pay off the debts of the business.
The pension money remains separate and the money you’ve paid in remains yours.
Some pensions known as defined benefit (DB) schemes may have a shortfall.
That means they have previously not been funded enough to cover what it needs to pay out – this is the case with Arcadia.
There are 9,500 staff who are part of Arcadia’s pension scheme.
Sir Philip Green previously promised to help top up the shortfall agreeing in 2019 to pay hundreds of millions into it.
Because of covid, these payments were paused and the shortfall is now up to £350m.
Green has been urged to continue to fund the pension scheme if Arcadia falls into administration.
He previously paid cash into BHS’s pension fund after it went under.
But if he doesn’t, people’s money will still be protected, though some may receive less than they would have in retirement.
The Pension Protection Fund (PPF) acts as a “lifeboat”.
The government-backed fund steps in and guarantees members of the pension scheme get at least 90% of the payout they would have received had the business continued trading.
Anyone wanting pensions advice can contact The Pensions Advisory Service for free at:
According to The Sunday Times Rich List in 2019, his private wealth totalled £950million.
Only last year Sir Philip’s retail empire was saved from the brink of collapse after his wife agreed to bail him out of financial woes.
The move saw Arcadia shut 48 stores and axe 1,000 jobs.
Sir Philip is believed to be unlikely to buy back any of Arcadia’s business from administrators.
But if the insolvency is confirmed, it’s expected to trigger a scramble among creditors to get their hands on the company’s assets, such as the online platforms – although some brands are expected to be more popular than others.
Richard Hyman, independent retail analyst said: “Topshop remains a good brand. With some investment and the right leadership team, I think it can be turned around to make decent returns.”
Online fashion retailers Boohoo and Misguided are believed to be among prospective Topshop buyers.
By Mr Hyman also warned: “The other brands peaked more than 20 years ago – before Philip Green bought them.
“The most likely outcome is the names, websites and critically, their stock will be acquired for pence in the pound. I think it unlikely they will be bought as going concerns.”
If administrators are appointed, the business will be afforded some protection from creditors.
Jonathan Compton is a partner at city law firm DMH Stallard said: “The group will be afforded a moratorium from its debts whilst a buyer or buyers are found to run the group or parts of it.”
But Invoice insurance firm Nimbla estimates that the chain’s collapse will leave £250million worth of invoices unpaid.
Consumers can still shop from Arcadia’s brands for now and sources told The Sun gift cards will still be accepted, even if it goes into administration.
However, it’s worth spending the cash sooner rather than later as the policy could change in future.
House of Fraser, for example, temporarily stopped accepting gift cards when it went into administration in 2018.
Debenhams shoppers were also urged to spend their gift cards when the department store went into administration last year.
Arcadia has more than 500 shops in the UK, with the majority of branches in England currently closed due to current Covid-19 restrictions.
Sir Philip Green bought the high street group in 2002 for £850million.
Three years later he paid one of the largest-ever dividends – a massive £1.2billion – to his wife and registered owner, Lady Tina Green.
During David Cameron’s reign as Prime Minister he helped advise on public sector waste and was seen as a high street magnate.
His reputation was first questioned over his decision to sell the department store chain BHS in 2015 for £1 to Dominic Chappell, a former bankrupt who has recently been jailed for tax evasion.
The former king of the high street was then blasted following the demise of BHS in 2015 over a £571million pensions black hole.
In 2017, the tycoon agreed to pay £363million into a BHS pension fund.
Two years ago, he was accused of groping numerous staff and other women.
It led to former MP Frank Field calling for him to be stripped of his knighthood.
Over the years Sir Philip has been pictured hobnobbing with A-list celebs including Bill Clinton and Elizabeth Hurley, rarely shunning the limelight.
For his 60th birthday in 2012, his wife Tina threw him a four-day party costing an estimated £6million, with attendees that included Naomi Campbell, Leonardo Dicaprio and Kate Hudson.
A spokesperson for Arcadia previously told The Sun: “We are aware of the recent media speculation surrounding the future of Arcadia.
“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.
“As a result, the Arcadia boards have been working on a number of contingency options to secure the future of the Group’s brands.
“The brands continue to trade and our stores will be opening again in England and Republic of Ireland as soon as the Government COVID-19 restrictions are lifted next week.”
Dave Gill, national officer of retail trade union Usdaw, said the reports are “a devastating blow for workers at Arcadia and could not have come at a worse time, just before Christmas”.
He added: “We are seeking urgent meetings with management and we urge them to end their longstanding anti-union stance and engage with us.”
In mid-August, more than 43,000 retail jobs had been axed since the start of coronavirus lockdown as high streets struggled to survive.
And in March, Laura Ashley collapsed into administration after talks to rescue the chain failed for the same reason.