One of the biggest names of the U.K.’s high street could be the next victim of the rapidly changing retail environment.
Sir Philip Green’s Arcadia Group — which owns Topshop, Dorothy Perkins, Miss Selfridge and others — is preparing for restructuring proceedings, which could include widespread store closures and job losses, inside sources told Sky News.
The group will likely propose a company voluntary arrangement (CVA) — a U.K. insolvency procedure somewhat akin to Chapter 11 in the U.S.; both give companies temporary relief from creditors in order to reorganize in hopes of returning to profitability.
Sources told the publication that the proceedings could begin as soon as late April or early May, though 75 percent of Arcadia’s stakeholders by debt value would need to approve the plan. Among the most significant creditors are the retailer’s landlords and the Pension Protection Fund (PPF).
The company operates more than 2,500 locations worldwide, including about 570 standalone stores, though it has closed about 210 over the past two years. If the CVA is approved, it will follow in the footsteps of the New Look chain, which announced plans to shutter 85 stores last year as part of its restructuring efforts.
The British high street has been struggling against the headwinds of rising costs, shrinking revenues and an uncertain political environment. Even Asos, for years one of the world’s fastest-growing fast-fashion retailers, faced disappointing results over the holiday season and was forced to cut its forecasts for 2019.
So far this year, U.K. retailers have announced 310 store closures and 327 store openings, according to data released Friday by retail advisory Coresight Research. Meanwhile, in the U.S., the wave of retail Chapter 11 filings that started around 2016 amid digital disruption and consumer shifts toward experiential spending have spilled into 2019. Payless ShoeSource, Charlotte Russe and luxury footwear customization startup Shoes of Prey have already announced their liquidations this year — joining now-defunct firms such as The Sports Authority and The Limited.
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