What Arcadia going into administration actually means for retail workers

Arcadia Group, which owns Topshop, Topman, Miss Selfridge, Dorothy Perkins, Evans, Wallis and Burton, has gone into administration.

But what does that actually mean for shoppers and, crucially, for the people whose jobs depend on it?

When the management of a company can no longer afford to pay their debts, they might hand over its control and assets to administrators who, in Arcadia’s case, are from Deloitte. The administrators will try to stop the company from needing to shut down completely and will protect it from legal action.

They have a year to either sell the company, turn its fortunes around or go about the process of dissolving it. It is thought that some or all of Arcadia is likely to be sold, but that its chairman Sir Philip Green is unlikely to bid for any part of it.

Green is a controversial figure both in and outside of the business world and was at the helm of British Homes Stores (BHS) when it permanently closed in 2016 after going into administration and failing to attract a buyer.

The good news for retail workers and their direct management is that when nonessential shops reopen on 2 December, trading will continue as normal. No-one has been made redundant as a result of Arcadia going into administration so far.

But 13,000 jobs hang in the balance, right before Christmas and amid an unemployment crisis. No-one knows at this point what changes for workers might occur across the next couple of years. 

Arcadia’s collapse could also damage the prospect of Debenham’s recovery, which went into administration in April and is supplied in part by the group. JD Sports which considering rescuing the department store has already backed out of talks.

This is causing anxiety among retail workers, who already face the additional stresses of working on the high street during the Christmas period and during the coronavirus pandemic.

Another concern is that the future pensions of Arcadia Group workers are secured. Labour and Unite union have called on Green to personally ensure that the deficit of around £350m in pension funds is rectified.

It has been reported that workers who have not yet hit retirement age could lost up to 10 per cent of their expected pension if it is not.