Sir Philip Green’s high street empire fell into administration owing its creditors £750 million.
The Topshop chain, once the most valuable part of his empire, collapsed with gross liabilities of more than £550 million. Outfit, the discount brand, owed £80 million.
Arcadia’s debts are steeper than originally thought and suggest that creditors may receive less than they might have hoped. The figure is thought to exclude unsecured debt to the company’s retirement fund and liabilities to HM Revenue & Customs.
Deloitte, which is handling the administration, will provide further updates to creditors. Arcadia called in the firm last month in the most striking sign yet of the damage inflicted on the high street by the pandemic.
Asos, the online fast-fashion seller, has confirmed that it is in talks to acquire the Topshop, Topman, Miss Selfridge and HIIT brands. In a further sign of the changing of the guard, Boohoo, another online-only fashion retailer, has agreed to buy Debenhams’ digital business for £55 million in cash. Neither wants to acquire any of stores.
Arcadia’s fall marked the end for a high street stalwart that traced its origins to 1903 when Montague Burton, an 18-year-old Lithuanian immigrant, started a menswear business.
It also drew the curtain on the decades-long career of Sir Philip, 68, the self-styled king of the high street. He was once fêted for his dealmaking prowess, but was slow to adapt to changing consumer behaviour.
It is unclear whether Arcadia’s large liabilities will affect the 9,000 members of its pension scheme. It had a deficit of £138 million in 2018, but experts said it could cost as much as £350 million to offload the liabilities to an insurer.
The retirement scheme is one in a queue of creditors, but in 2019 it secured some guarantees from the company and Lady Green, 71, Sir Philip’s wife who lives in Monaco and is the registered owner of the company. She received a £1.2 billion tax-free dividend from the company in 2005.
Arcadia provided the scheme with a security over its main Topshop store on London’s Oxford Street and an office building on Tottenham Court Road. However, they have mortgages against them and their value is likely to have fallen during the pandemic.