LONDON: British clothing retailer Arcadia, ravaged by coronavirus lockdowns and fierce online competition, remains on the brink of bankruptcy despite an emergency loan offer, the BBC reported Monday.
The owner of high-street chains including Topshop, Topman, Dorothy Perkins, Burton, Miss Selfridge, Evans and Wallis, is set to enter administration “within hours”, the BBC reported citing senior company sources, in a move that would threaten some 13,000 jobs.
The failure would deliver another body blow to Arcadia boss Philip Green, whose reputation had already taken a battering from the high-profile collapse of retailer BHS four years ago.
British sportswear tycoon Mike Ashley’s Frasers Group meanwhile confirmed Monday that it has offered a £50 million loan to help Arcadia avoid bankruptcy.
Sources, however, told the BBC that they do not anticipate a rescue deal from Ashley, who also owns Newcastle United football club and bought troubled department store chain House of Fraser in 2018.
“Frasers Group notes recent press reports concerning the potential provision of emergency funding by the company to the Arcadia Group,” Frasers said in a statement.
“The company can confirm that it has made an offer and provided draft terms to the Arcadia Group for a loan of up to £50 million and is now awaiting a substantive response.
“Should the company and the Arcadia Group’s efforts to agree an emergency funding package fail and the Arcadia Group enter into administration, the company would be interested in participating in any sale process.”
Arcadia had stated on Friday that the deadly Covid-19 pandemic has had a “material impact” on trading due to enforced closures during lockdowns, adding it was working on “a number of contingency options” to secure the future of its brands.
Back in 2015, Green sold retailer BHS for just £1 to Dominic Chappell, a former bankrupt businessman with no retail experience. BHS then collapsed one year later, resulting in 11,000 job losses and leaving a massive deficit in its pension fund.