Sir Philip Green’s retail empire is preparing to appoint administrators as soon as next week, putting thousands of jobs at risk, Sky News reported on Friday.
Arcadia Group, behind high street chains including Topshop and Burton, is facing collapse within days and is preparing to appoint administrators from Deloitte.
Arcadia today said: “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 firm added that brands continue to trade and its stores will be opening again in England and Ireland as soon as the Government Covid-19 restrictions are lifted next week.
Deloitte declined to comment.
Sky News said one retail industry figure said a collapse had become “inevitable” after talks with a number of lenders about an emergency £30 million loan ended without success.
The company approached potential lenders about borrowing the sum to prop-up the business after seeing its pre-Christmas trading plans hurt by the latest lockdown, it was reported earlier this month.
If the insolvency is confirmed, it would likely trigger a scramble among creditors to get their hands on the company’s assets.
It comes after a turbulent few years for Arcadia since it offloaded BHS in 2015, with the ongoing decline of bricks-and-mortar retail suddenly accelerated by the pandemic's devastating hit.
Arcadia underwent restructuring last year through a company voluntary arrangement (CVA), a model that allows firms to close some sites or get rent cuts.
Dave Gill, Usdaw national officer said: “This is a devastating blow for workers at Arcadia and could not have come at a worse time, just before Christmas. We are seeking urgent meetings with management.”