The Arcadia retail group is working on “contingency options to secure the future of the group’s brands”, following reports that it will collapse into administration within days, with 15,000 jobs at risk.
The company owned by Sir Philip Green behind brands such as Topshop and Dorothy Perkins. It has released a statement saying it is “working on a number of contingency options.”
In response to news that Deloitte might soon be appointed administrators for the business, putting 15,000 jobs at risk, the company 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 brands continue to trade and our stores will be opening again in England and ROI as soon as the Government Covid-19 restrictions are lifted next week.”
The group had been in emergency talks with lenders in a bid to secure a £30m loan to help shore up its finances.
If the insolvency is confirmed, it is expected to trigger a scramble among creditors to get control of company assets.
It is the latest retailer to have been hammered by the closure of stores in the face of coronavirus, with rivals including Debenhams, Edinburgh Woollen Mill Group and Oasis Warehouse all sliding into insolvency since the pandemic struck in March.
The group has more than 500 retail stores across the UK, with the majority of these currently shut as a result of England’s second national lockdown, which will end next week.
Shopworkers’ union Usdaw said the concerns over Arcadia will be “devastating” for staff.
Dave Gill, Usdaw national officer, said: “2020 has been a terrible year for the high street, with more than 125,000 retail jobs lost and over 13,000 shops permanently shut. Retail job losses and store closures are absolutely devastating and lays bare the scale of the challenge the industry faces. Each one of those job losses is a personal tragedy for the individual worker and store closures are scarring our high streets and communities.
“What retail needs is a tripartite approach of unions, employers and government working together to develop a recovery plan. We have long called for an industrial strategy for retail to help a sector that was already struggling before the coronavirus emergency.
“The Government needs to level the playing field on taxation between online and the high street, reform business rates that are strangling so many businesses, as well as enabling councils to breathe new life into town centres and make them community hubs.”