Arcadia, the owner of Topshop, Burton, and Dorothy Perkins has gone into administration, putting 13,000 jobs at risk.
The high street giant has hired administrators from the Deloitte Group after the pandemic “severely impacted” sales across their shops.
The group has said no redundancies will be announced immediately and stores will continue to trade as Deloitte considers the options available to the group.
The Arcadia Group, owned by Sir Philip Green, had failed to secure extra funding to pay its debts after the pandemic caused sales to plummet.
The group, which has over 400 stores in the UK and 22 overseas, said 9,294 employees are currently on the Government’s Furlough scheme.
One worker from Glasgow, who wished to remain anonymous, had gone back to work once the store had reopened after lockdown.
While stores are allowed to remain trading, their store in Glasgow has been closed under the Scottish Government’s Coronavirus tier system which has placed the City of Glasgow in the highest tier, meaning all non-essential shops must close.
They said: “Not having that December payment mean it’ll become tight.
“I might have to budget a lot more and with rent and bills etc it could become difficult.”
They also said there had been speculation for a while, however they found out over the news that their company had gone into administration.
The source did however receive an email from the company after assuring her there would be no redundancies and she would remain on furlough until further announcements have been made.
The administration will give the group some space from creditors, like landlords for its shops, while a buyer is sought for all or just parts of the company.
Arcadia executives will still have control of the day-to-day control of the business.
Ian Grabiner, the boss of Arcadia, has said the decisions marked an “incredibly sad” day for the group.
“The impact of the Covid-19 pandemic, including the forced closures of our stores for prolonged periods, has severely impacted trading across all of our brands.
“Throughout this immensely challenging time our priority has been to protect jobs and preserve the financial stability of the group, in the hope that we could ride out the pandemic and come out fighting on the other side.
“Ultimately… in the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe.”
Matt Smith, joint administrator at Deloitte, said they would be working with Arcadia management to assess all of their options for the group’s brands.
He said Deloitte would seek expressions of interest as quickly as possible and expect to identify one or more buyers to hopefully ensure the future of their shops.
Feature Image Credit: – Retail Gazette