Arcadia Group, Sir Philip Green’s retail empire, has entered administration, risking 13,000 jobs, according to internal sources.
The sources asked not to be named, because the company is yet to comment publicly on the matter. However, they said they do not expect a rescue deal. Arcadia has now hired Deloitte as administrators for the company.
An Arcadia spokesperson told Forbes last week: “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.
“The Arcadia boards have been working on a number of contingency options to secure the future of the Group’s brands.”
Arcadia’s brands include Topshop, Topman, Miss Selfridge, Burton and Wallis. This makes it potentially the most high-profile retail insolvency since the pandemic hit in March. Stores are expected to continue trading as normal until the administration process has become clearer.
Mike Ashley’s Frasers Group confirmed yesterday (30 November) that they had offered a £50 million loan to Arcadia this weekend. They have also confirmed they “would be interested in participating in any sale process” that follows Arcadia’s insolvency.
Arcadia employs 13,000 staff over 500 flagship stores. Five hundred of Arcadia’s head office staff already lost their jobs in July. Sir Philip Green has come under pressure from MPs and unions to use his personal wealth to fill the large deficit in Arcadia’s pension scheme ahead of the company’s collapse. Stephen Timms, chair of parliament’s work and pensions select committee, estimates the funding shortfall at £350 million.
This isn’t the first time Sir Philip Green has come under fire for a pension deficit.
Green previously sold department store chain BHS for £1 in 2015. He later had to settle a deficit in the pension scheme of £345 million. Politicians across the UK called for Green to be stripped of his Knighthood in 2017 because of this controversy.
In 2019, a UK politician told Green to admit that the deficit in Arcadia’s pension pot was between £537 million and £727 million.
Former MP Frank Field told Forbes: “We know the deficit is bad or else the size of it would be published. The fact that it’s not published makes it doubly worrying.
“The truth is, he’s a billionaire on the basis of these companies, and these company’s pensioners have the right to some of his billions.”
Sir Philip and his wife, Lady Cristina Green, now have an estimated net worth of £950 million. This is down from an estimated £3.6 billion in 2018. They live together in the tax haven of Monaco. As of 2018, Lady Green owned all of the shares in Taveta, the parent company of Arcadia, registered in the tax haven of Jersey.
In 2016, Lady Green wrote to MPs that tax havens are “preferred for their strong regulatory regimes”.
Among their assets are a £46 million Gulfstream private jet and a 295 foot luxury yacht valued at £100 million.