The end of Topshop and Arcadia would be the biggest UK collapse of the pandemic
Nov 30, 2020
Once the king of the high street, Topshop parent company Arcadia would be the biggest corporate collapse during the time of the pandemic if it goes into administration.
With its 500 store portfolio its closure would create giant craters in the high street leaving unfillable gaps.
Questions about what will happen to Arcadia’s 350 million pound deficit will remind of owner Sir Philip Green’s similar fiasco of the BHS collapse, selling the ailing department store chain for one pound to Dominic Chappell in 2015.
No longer the retail tycoon that once secured Kate Moss as its face, Topshop and its Arcadia contemporaries have been struggling for years. Richard Lim, chief executive at Retail Economics, said that while all clothing shops had been adversely affected by the pandemic, Arcadia’s “demise has been accelerated because of an online proposition that falls way behind that of their competitors”.
“Years of underinvestment in the digital channel has severely restricted their ability to trade successfully through this hugely difficult period,” he said. Last year Arcadia implemented a ‘rescue’ plan which saw the closure of 50 stores and 1,000 job losses.
Not digital first
Retail analyst Kate Hardcastle told the BBC Topshop “lost relevance with their consumers.” Customers want to have conversations with brands and Topshop “dipped out of that.” Primark and Boohoo took marketshare, selling discounted goods which appealed to Arcadia’s price conscious customer. Arcadia was never a digital first business, with perhaps too many stores and not enough prowess online.
Less apparent are the hundreds of suppliers and smaller businesses in Arcadia’s supply chain that will also suffer. A ripple effect that could potentially force other companies into bankruptcy.
Yet while Arcadia is about to go bust, Sir Philip Green has been photographed aboard his super-yacht in Monaco. Green’s wealth comes primarily from a tax-free 1.2 billion pound dividend paid out to his wife Tina Green in 2005, who is the official owner and a domicile of Monaco. The colossal sum remains the biggest pay cheque in British corporate history.
More than 13,000 jobs are at risk if Arcadia goes into administration.
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