Arcadia Group To Shutter All U.S. Topshop And Topman Locations
Arcadia Group, a British fast-fashion retailer, has filed for bankruptcy in the United States, and plans to close all of its 11 free-standing Topshop and Topman stores in this country. The fate of Arcadia's partnership with Nordstrom, where it sells Topshop and Topman clothes, isn't clear yet.
The London-based company will pursue liquidation in the U.S. under the terms of a Chapter 15 bankruptcy, which deals with foreign insolvencies. At the same time it is undertaking a separate insolvency process for the brand in the U.K.
Arcadia said it would try to sell some or all of its American stores as operating businesses, but if that proves impossible, the company will begin shutting them down, the Wall Street Journal reports. With that eventuality in mind, the company has tapped Hilco Merchant Resources to help it liquidate its U.S. inventory.
Unless Arcadia finds a buyer, the closures would also include the brand's flagship in the U.S., its Fifth Avenue shop in New York, which has been quietly up for sublease in any case. The company opened the 40K SF store in late 2014, opposite Saks Fifth Avenue.
Arcadia's bankruptcy is the latest in a growing string of retailers going belly up in the United States. Gymboree Group, Shopko, Payless ShoeSource, Charlotte Russe Holding and FullBeauty Brands have all filed for bankruptcy since the beginning of 2019.
Arcadia has also unveiled a plan to close 23 of its locations in the U.K and Ireland, and is looking to renegotiate its leases for more than 190 other stores to try to get better terms.
Such bargaining might ultimately involve a company voluntary arrangement for Arcadia, which is an insolvency mechanism in the U.K. A number of those have already happened this year in that country, as retailers struggle there as much as they do in the United States.
Landlords dislike CVAs — which allow for lower rents — but sometimes grudgingly acknowledge that they can prevent a total collapse of a retailer.
Arcadia, which is controlled by Sir Philip Green and his wife, Tina, has bigger problems than the Topshop brand. Its other brands include Burton, Dorothy Perkins, Evans, Miss Selfridge, and Outfit and Wallis, many of which have faced a bad combination of rising costs and declining sales and profits in recent years, the Financial Times reports.
Also, Green has been the subject of criticism about his behavior toward Arcadia employees and his use of nondisclosure agreements to prevent former workers from discussing their severance packages, Sky News reports.
Beyoncé, who previously sold her Ivy Park athleisure line at Topshop, cut ties with the retailer late last year following sexual harassment allegations made against Green, Elle reports. Beyoncé has since moved forward with a partnership with Adidas.
Green denies all reports of unlawful sexist and racist behavior.
