Sir Philip Green’s Arcadia Group could permanently close some of its shops as the coronavirus pandemic takes a toll on high street retailers.
The fashion group has served notice on its landlords that it will leave stores where the leases have rolling breaks or are due to expire.
It is understood that the move does not necessarily mean shops will close permanently but that the retailer can enter into negotiations with landlords on how to keep them open. In March, the company asked landlords for rent cuts and paused payments into its pension scheme.
The potential closures are not believed to be centred on any particular brands and the number of stores that could be affected has not been confirmed. All of the group’s 550 stores across the UK are closed as the coronavirus lockdown measures, which could last until June, prevent Britons from shopping for anything other than food and essential needs.
Like other retailers, Arcadia is facing financial turmoil and earlier this month said 14,500 of its 16,000 employees would be furloughed and apply to the government’s emergency wage scheme.
But the retail group had been hit by financial troubles before the Covid-19 crisis. Its high street brands reported pre-tax losses of £505.1m for the year to September 2018, according to accounts published on Companies House.
A series of company voluntary arrangements (CVAs) were proposed in May last year as part of a wider three-year recovery plan, which led to the closures of 23 stores and rent slashes on many others.
Under the rescue deal, the group’s US operations went into administration and an additional 25 Evans and Miss Selfridge stores were closed.
On Friday, the department store retailer Debenhams confirmed the closure of seven shops with the loss of more than 422 jobs after going into administration last week.
Meanwhile, the struggling fashion chains Oasis and Warehouse collapsed into administration, putting 2,300 jobs at risk.
Arcadia declined to comment.
