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    Home » Arcadia Retail Empire D-Day Looming

    Arcadia Retail Empire D-Day Looming

    npsBy nps12 June 2019Updated:3 July 2024 No Comments3 Mins Read
    — Filed under: Focus
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    A decisive D-Day vote between landlords and creditors is set for Wednesday 12 June in London, in order to decide whether they wish to help save Sir Philip Green’s Arcadia retail empire from annihilation.

    Arcadia’s high street brands, which boast over 3,000 stores all over the world include; Topshop, Burton, Dorothy Perkins and Miss Selfridge, seem to be following the trend of the European retail sector, after being hit hard by e-commerce competitors. The retail group were handed a blow last week after their owner Sir Philip Green’s proposals were postponed following disagreements by major shopping centre owner, Intu, that look to be refusing to slash the shop space rent prices to help Arcadia survive in a very competitive retail world.

    Should there be no lifering offered to Arcadia with the new proposals, they will most definitely fall into administration, a move that will mean that thousands of employees will become redundant. Therefore, this roulette game which is reminiscent of the games you might find when playing on www.bestcasino.com is one that is going to be played out in the coming weeks.

    London High Street - Image Pixabay.com

    It is hard to believe that only two years ago the retail giants had a yearly earning of £219million with the 2019 earnings predicted to be as low as £30million. This comes as no surprise to many retail analysts as the group announced back in May 2019 that they are undergoing “significant liquidity issues” as they are being outmuscled by digital retail giants Amazon and other online shops such as asos and eBay.

    To add salt to the wounds, in a somewhat timely manner, earlier this month, Amazon has opened its first ever physical pop-up shop in Manchester, UK, with ten more shops due to pop-up across the UK in the coming months.

    It is the shocking ignorance of global trends and the lack of understanding people’s shopping habits that has cost the group so dearly, as they continue to rely heavily on footfall rather than clickfall. The proposal for a reduction of rent rates is almost like putting a plaster on a broken leg, what the retail group must do is invest heavily in their e-commerce capabilities to entice regular online shoppers or even partner with existing giants such as Amazon, should they wish to keep afloat rather than drown down the administration route.

    Should Sir Philip Green’s first of seven Company Voluntary Arrangement (CVA) proposals be voted on successfully, it will mean that 1,000 jobs will be lost with 48 stores being closed and a rent reduction of between 25% – 50% for nearly 200 stores. As part of this deal, Sir Philip Green will also look to invest £50million of his own money into the business and give the landlords 20% stake in Arcadia, to be used only if it gets sold.

    Speaking to the BBC, retail analyst Chris Field said: “I think they’ll reject Philip Green’s current rescue deal and there will be more discussions. But at some point, the landlords and shareholders are going to have to accept some kind of a deal.”

    This situation should surly make the major landlords rethink their strategy, as they attempt to keep Arcadia’s rent charges as high as possible, so as not to offend their other tenants. The reason for this is very obvious, if Arcadia go bust as a result of not being able to pass the CVA’s, then they will lose out on millions of pounds in revenue which as things stand they are not likely to see with online shoppers preferring to ditch the high street in favour of their digital devices.

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