retail

Top Shop owner Arcadia shuts all stores until further notice

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Arcadia, owner of Topshop, is closing all stores across its fashion empire in response to the coronavirus pandemic, making it the largest UK retailer to shut shops because of the virus.

“In line with many other retailers the group has made the difficult decision to close until further notice all of our stores from 4pm this afternoon,” said the group owned by Philip Green on Friday. 

The chains affected include Topshop, Dorothy Perkins, Wallis, Evans and Burton.

“All store staff remain employees during this time and will be paid their normal pay for March plus any outstanding overtime payments, after which we will review this situation and will be keeping our store teams updated.”

The UK government on Friday said it would pay up to 80 per cent of the wages of anyone furloughed, rather than made redundant, with the scheme to start “within weeks”.

The announcement, which many business leaders had been calling for, is likely to prompt more temporary store closures, said analysts, as it removes the uncertainty over how to pay employees at a time when there is no revenue coming in.

Marks and Spencer, another big presence on the UK’s high streets, also on Friday said it could not rule out temporary closures, although it has a sizeable food operation in addition to its clothing and home business.

River Island also closed its remaining UK stores, having shut London outlets the previous day and those in Ireland on Wednesday.

Shoe chain Clarks, upmarket fashion brand Reiss and US-based discounter TK Maxx had already announced the closure of UK stores, along with Swedish home furnishings group Ikea.

Even London’s marquee department stores such as Selfridges and Harrods have closed during the pandemic.

Other European countries such as Spain, Italy, Germany and France have ordered the closure of “non-essential” stores to reduce social contact that might spread the disease.

In the US several retail chains have also closed temporarily in response to the pandemic, including Apple. The state of New York on Friday told all but essential workers to stay at home.

Arcadia undertook a complex financial restructuring last year to help it cut its lease obligations and close unprofitable stores in an estate numbering more than 500 outlets. But industry analysts said trading has remained very difficult since then, with a wet and stormy February depressing shopper numbers even before the full impact of the virus was felt. 

High street rival Next on Thursday said the decline in store sales had begun to accelerate in February and that March 15 store revenue was down by almost half.

Chief executive Simon Wolfson said the contraction in demand was likely to go on for some time. “No one buys a new outfit to sit at home,” he added.

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