Sir Philip Green’s fashion empire Arcadia could close some stores down permanently as a result of the COVID-19 crisis as it negotiates with landlords over lease terms.
All of its 550 stores are on enforced lockdown and it had been rumoured earlier this month that Arcadia was in talks with landlords.
The PA news agency now reports that Arcadia is in discussion with landlords over leases with rolling break clauses, allowing the group to terminate a lease at any time during a term.
While landlords may be served with three months’ notice, it does not necessarily mean the stores will close as new arrangements could be made to keep them open.
It has not been confirmed how many stores or which of Arcadia’s brands – which include Topshop, Topman, Dorothy Perkins, Miss Selfridge, Wallis, Evans and Burton – could be affected.
The group was suffering financial troubles before the COVID-19 crisis. 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.
The rescue deal also led to the group’s US operations being placed into administration and the closures of an additional 25 Evans and Miss Selfridge stores.
Landlords voted through the plans in June but only after Sir Philip and his wife Lady Tina were forced to offer some concessions funded from their own pockets to get approval for the measures.
In December, Sir Philip struck a £310 million deal with US private equity giant Apollo to remortgage the flagship Topshop store on London’s Oxford Street, ahead of the deadline set at the end of the year.
Following the temporary closure of its store as a result of the COVID-19 crisis, Arcadia furloughed 14,500 of its 16,000 workforce and management took pay cuts. Its brands continue to operate online, albeit in a limited capacity,
The economic havoc wrought by the pandemic has hit fashion retail hard as all have been forced to close their physical stores and limit their online operations to ensure appropriate social distancing measures are adhered to in their warehouses.
On Friday, department store Debenhams confirmed the closure of seven stores with the loss of 422 jobs after sliding into administration last week. However it says it has agreed deals to keep 120 of 142 stores open, after the lockdown, with negotiations on
Meanwhile, struggling fashion chains Oasis and Warehouse collapsed into administration, with around 2,000 workers across 92 stores and 437 concessions affected. It is believed that talks with potential buyers for the chains, which had been owned by failed Icelandic bank Kaupthing, remain underway.
Other retailers looking for new owners include shirt-maker TM Lewin, footwear chain office, lifestyle retailer Cath Kidston and fashion and furniture retailer Laura Ashley.
Arcadia declined to comment on the latest developments..