The High Street could be on the verge of collapse, as retail giant Arcadia fell into administration, putting some 13,000 jobs at risk and Debenhams is shutting down.
The retail empire owned by Sir Philip Green owns the Topshop and Topman brands, as well as Burton, Dorothy Perkins and Miss Selfridge among others.
Arcadia operates from 444 sites in the UK as well as online, and currently has more than 9,000 staff on furlough.
It has faced major financial damage from non-essential retail stores being forced to close as a result of the coronavirus pandemic.
The fate of Debenhams was sealed after JD Sports pulled out of talks to rescue the retailer from collapse.
Now, 124 stores will close and more than 12,000 staff are likely to lose their jobs as administrators try to find a buyer.
Talks began after Debenhams slashed more than 2,500 jobs across the UK in August amid slow sales figures post-lockdown.
Arcadia went into administration after rejecting a £50 million loan offer from Frasers Group, a high street rival of Philip Green’s.
There is now growing pressure on Mr Green to fund the future of the company’s pension scheme, valued at around £350 million.
Deloitte has now been drafted in to find a buyer for the company and help keep the businesses running.
Matt Smith, joint administrator at Deloitte, said: “Arcadia sits at the heart of the high street, and has been striving to combat the impact of COVID-19 throughout this year.
“Now the effect of the lockdowns, combined with broader challenges facing bricks and mortar retailers, have resulted in a critical funding requirement for the group and today’s administration.”
No redundancies have been made as yet, and the stores are expected to open and trade as normal once lockdown is lifted on Wednesday.
Orders made online over the Black Friday weekend will be honoured, according to administrators.
The writing was on the wall
Colin Davie, the county councillor in charge of economic development, said: “We all know that the high street was already in decline but COVID-19 has accelerated that process as online shopping has increased at a furious pace.
“The current high street, as we knew it will not return. We need to work at pace and redesign our high streets so they are full of local shops and businesses offering products and services which are not available online.
“They need to become destinations in their own right, rather than places we pass through.
“We need to start the process of getting people living in apartments on high streets above the reduced retail space below and we need to support these local businesses to digitise so they can compete with major online retail.
“I fully recognise that absentee landlords demanding sky high rents and the business rates regime is a physical barrier to retailers wanting to even be on a physical high street and government needs to urgently review their position in these regards.
“The announcement of this morning will sadly not be the last.”