Britain's Arcadia, owner of the Topshop clothing brand, is getting closer to bankruptcy on Monday after refusing an emergency loan offered by the Frasers group of businessman Mike Ashley.
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True empire of the sulphurous businessman Philip Green, Arcadia, known for its brands like Topshop, Dorothy Perkins and Burton, is on the verge of bankruptcy and could imminently go into bankruptcy, joining the list of distributors victims of the pandemic.
The company has given no explanation for its refusal of a loan of 50 million pounds (55 million euros), said Frasers in a statement Monday.
The latter, which owns the sports goods chain Sports Direct and the House of Fraser department stores, announced early Monday morning to offer this loan to Arcadia to allow it to escape bankruptcy.
The BBC had indicated for its part that there would be no last-minute bailout and that the Deloitte cabinet would be appointed administrator.
On Friday, Arcadia had indicated to evaluate several "
", while according to the British press the group failed to agree with its creditors to obtain a loan of 30 million pounds.
Bankruptcy of the group, which has 13,000 employees after recent job cuts and more than 500 stores, would be a thunderclap in British commerce hit hard by the health crisis and the rise in online shopping.
The bankruptcy placement would allow the group to be able to sell its various brands, Arcadia also planning to reopen its stores in England this week after the confinement.
Arcadia's difficulties are added to the long list of retailers in peril or which have gone bankrupt since the start of the new coronavirus pandemic, and which very often already suffered from a drop in attendance and sales competition in line.
The Frasers group had specified Monday morning that if Arcadia were to file for bankruptcy, it would position itself to buy back assets.
Mike Ashley is known to have built his retail empire by buying ailing brands that he is trying to turn around through restructuring.
Arcadia's assets could also be of interest to online clothing sales specialists such as the Boohoo group.
A bankruptcy of Arcadia would represent a bitter failure for its owner, Philip Green, whose career is punctuated by several scandals and who failed to negotiate the digital shift in order to modernize a once very popular group.
Topshop, acquired in 2002 by the businessman, served a few years ago as an emblem of young and trendy fashion after making its debut in 1964 in the basement of a department store in Sheffield (north ).
The brand was then known for the variety of its clothes and the strong responsiveness of stylists to catwalk trends.
The lack of consistency in the strategy to adapt to changes in consumer habits and the switch to online shopping have made the group struggling for several years,
" said Michael Hewson, analyst at CMC Markets, about Arcadia.
The result is that more stores could disappear from shopping streets in the coming weeks, unless there is a rescue,
" he said.
The fall of the controversial Philip Green's empire could also darken the future of another brand well known to the British.
Department stores Debenhams filed for bankruptcy in April and are in talks to be taken over by sporting goods chain JD Sports.
However, brands like Topshop are among the most represented in the stores under concession sheltered by Debenhams, which raises fears of a failure of negotiations with JD Sports.
Read also: The British Arcadia, owner of Topshop, on the verge of bankruptcy
Britain's business is experiencing serial bankruptcies, with the most recent being UK clothing chains Peacocks and Jaeger, which belong to billionaire Philip Day's EWM group, threatening around 4,700 jobs.
The British arm of the Victoria's Secret lingerie brand and the clothing and home goods chain Laura Ashley are among the other victims of the pandemic.