Arcadia stores under threat of permanent closure
Sir Philip Green’s Arcadia group could see some stores shut down permanently as a result of the coronavirus pandemic, following a string of closures in the past year.
The PA news agency understands Arcadia is in discussion with landlords over leases with rolling break clauses, allowing the group to terminate a lease at any time during a term.
While landlords may be served with three months’ notice, it does not necessarily mean the stores will close as new arrangements could be made to keep them open.
It has not been confirmed how many stores or which of Arcadia’s brands, which include high street giants Topshop and Topman, could be affected.
The retail group had been hit by financial troubles before the Covid-19 crisis.
Its high street brands reported pre-tax losses of £505.1 million for the year to September 2018, according to accounts published on Companies House.
A series of Company Voluntary Arrangements (CVAs) were proposed in May last year as part of a wider three-year recovery plan, which led to the closures of 23 stores and rent slashes on many others.
The rescue deal also saw the group’s US operations go into administration and the closures of an additional 25 Evans and Miss Selfridge stores.
After landlords voted through the plans in June, business tycoon Sir Philip and his wife were forced to offer some concessions funded from their own pockets to get approval for the measures.
In December, Sir Philip struck a £310 million deal with US private equity giant Apollo to remortgage the flagship Topshop store on London’s Oxford Street, ahead of the deadline set at the end of the year.
The economic havoc wrought by the pandemic has seen many retailers close stores and furlough staff.
On Friday, department store retailer Debenhams confirmed the closure of seven shops with the loss of 422 jobs after sliding into administration last week.
Meanwhile, struggling fashion chains Oasis and Warehouse collapsed into administration, with around 2,000 workers across 92 stores and 437 concessions affected.
Arcadia declined to comment.