On November 29, the BBC reported that Arcadia group, the parent company of British fast fashion brand Topshop, could go into bankruptcy liquidation as soon as this Monday (November 30), local time.
Several executives told the BBC that Arcadia would be taken over as soon as Monday, endangering 13000 employees and possibly wiping out thousands of employees pensions.
Arcadia group is owned by the controversial British businessman Philip Green. The clothing retail giant owns fashion brands such as Topshop, Topman, miss Selfridge, Burton and Dorothy Perkins. Sources say they dont think there will be any aid deal at a critical time.
Photo source: visual China. However, Arcadia group has received an emergency loan of 50 million pounds from Frasers group, a British department store giant controlled by British billionaire Mike Ashley. The huge loan will ease the short-term cash flow problems of Arcadia group.
Frasers did not require the Topshop parent company to provide collateral for the loan. However, Frasers will withdraw the loan proposal as soon as Arcadia group or any of its brands goes into liquidation.
Currently, Frasers group is waiting for a final decision from the parent company of Topshop. Once the Arcadia group goes into bankruptcy proceedings, it will become the largest UK business to fail during the outbreak.
Arcadia executives dont think its a problem that 50m can solve. We can find 50 million pounds in five minutes. One executive told the BBC, we put in 200 million pounds a year ago for business and pensions, but now its hard to sustain.
The new crown epidemic is believed to be the main cause of the bankruptcy of Arcadia group. The number of people infected with the new crown epidemic in the UK has been high for a year, which has had a great impact on the consumer retail industry. Recently, the city was closed again because of the surge in the number of infected people, which is even worse for the retail industry. Nearly 500 stores of Arcadia group were forced to close down during the period of epidemic blockade. In July this year, in response to the epidemic crisis, the headquarters of Arcadia group laid off 500 employees.
With the launch of a second closure in the UK, Arcadia has managed to borrow 30 million pounds. However, several British media reported on November 26 (Friday) that the Duke of Philip Green had not been bailed out to potential borrowers.
Photo source: visual Chinas new crown epidemic may be the last straw that killed the parent company of Topshop, but the clothing retail giant has had serious business problems before. In the 12 months to August 2018, Arcadia Group sales fell 10.5% year-on-year to GBP 1.7 billion, with Topshop down 20% year-on-year. In fiscal 2017, Topshop lost 10.9 million pounds and group sales fell 5.3% to 1.9 billion pounds.
In mid-2019, Arcadia group was on the verge of bankruptcy for a time, and finally managed to survive the bankruptcy crisis after several creditors agreed to support the restructuring plan proposed by the company. In September last year, Arcadia group denied rumors that it would be split, saying its restructuring plan was a restructuring plan for its brands.
In 2017, Topshop declared bankruptcy in Australia and closed all its stores. But four years ago, the Arcadia group had completely withdrawn from the Japanese market. Arcadia may also close its stores in the US, Australia, Germany, the Netherlands and Ireland.
Topshops dilemma in recent years is not only in the overseas market, but also in its domestic market. In the late 1990s and the first decade of the millennium, Topshop returned to the fashion circle with its unique design style and good quality, and became a popular high street brand in Europe and America. At that time, Topshop became the first high street brand to enter London Fashion week. Fashion magazines regarded its designed clothing as a model of fashion. Supermodels such as Kate Moss also launched co branded series with Topshop. By 2005, Topshop had achieved an annual profit of 100 million pounds.
Top shop and Kate Mosss launch. After 2010, Topshops presence in the fashion industry has gradually declined. On the one hand, Topshop has lost in the competition with many European and American high street brands. Other stories, arket, cos and urbanoffitters have strong brand stories, while Zara and H & M, two fast fashion giants, have strong and fast supply chain systems to cope with the fast changing market.
In addition to the fact that the product is no longer attractive, Topshop is not competitive in the online market. Many consumers can build up the whole online supply chain as early as possible. Coupled with the rise of UK based fast fashion e-commerce companies, such as ASOs, boohoo and pretty little thing, Topshop has lost its appeal among the younger generation of consumers.
Source: editor in charge of interface news: Zhong Qiming_ NF5619