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Thousands of Arcadia employees have woken up to an uncertain future after the fall of Sir Philip Green’s retail empire last night.
The group behind street names like Topshop, Miss Selfridge, Burton and Evans has become the biggest casualty in retail since the start of the pandemic.
Deloitte now controls the company, whose problems – from a lack of investment to an inability to adapt to the world of online shopping – predate Covid-19.
Deloitte plans to keep the stores in business while they look for “one or more buyers,” meaning branches in England are expected to reopen tomorrow when the lockdown ends. It also suggests that the group could be dismantled, with some of its brands being acquired by competitors.
So for 13,000 employees, this is an extremely worrying turn of events as Christmas approaches.
Usdaw, the retail union, has said it wants urgent meetings with Arcadia directors in an effort to save jobs.
Dave Gill, Usdaw national officer, said:
“Now that Arcadia is in administration, it is essential that the voice of the staff is heard on the future of the business and this is best done through their union.
“We are looking for urgent meetings and need assurances on the efforts to save jobs, the store business plan and the funding of the pension plan.
“In the meantime, we are providing our members with the support and guidance they need during this very difficult time.”
Arcadia’s collapse also raises fears that staff may lose part of their pensions, given there is a deficit of perhaps £ 350million in their pension scheme.
The pressure is on Sir Philip Green to make up the deficit.
Like my colleague Nils Pratley written:
“Staff just want to know if and how Green plans to close Arcadia’s pension deficit.
The main reason that a pension fund deficit has persisted over the years is that the Greens extracted their famous £ 1.2bn dividend from Arcadia in 2005, which weakened its balance sheet and undermined its ability to make catch-up pension contributions during lean years. ”
Arcadia’s collapse could also have a very damaging impact on the UK retail space, with analysts estimating it could owe its suppliers up to £ 250million.
It also threatens to derail JD Sports’ bailout offer for Debenhams, as some Arcadia brands, such as Miss Selfridge and Dorothy Perkins, are sold in concessions in Debenhams stores, which represents a turnover. estimated at £ 75million.
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