Landlords will be hit by the collapse of Sir Philip Green’s fashion business Arcadia Group, the British Property Federation has warned.
Arcadia Group, behind brands such as Dorothy Perkins and Topshop, went into administration last night, putting 13000 jobs at risk.
Melanie Leech, chief executive of trade association British Property Federation said: “It is hugely disappointing that Arcadia hasn’t managed to find a way forward, and that so many jobs are at risk. Property owners and other creditors will also be hit.”
Arcadia, which has seen trade severely hurt by lockdowns this year, has about 444 leased stores in the UK and 22 overseas.
It has numerous landlords, among which there are a number of listed property companies, such as British Land, Hammerson and Landsec that let some shops to Arcadia.
The BPF’s Leech added: “It was only last year Arcadia undertook a controversial CVA, forcing property owners to accept significant rent cuts and promising in return that this would secure the business’ future.”
Leech said: “Retailers are grappling with challenges today that pre-date this pandemic but Covid is bringing into sharper focus which businesses have invested, innovated and adapted to changing consumer behaviours.
Those that have not have very little resilience in the face of economic headwinds and it is their staff and their creditors including property owners, and the millions of pensioners and savers they represent, who are paying for their failure.”
A number of retail property owners have seen rental income hit in 2020 as scores of retail and hospitality businesses have struggled to pay rent. Numerous high street businesses have suffered from lockdowns, forcing them to close sites and have less, or no, trade.
On Arcadia, Matt Smith, joint administrator at Deloitte, said: “We will be rapidly seeking expressions of interest and expect to identify one or more buyers to ensure the future success of the businesses."
