Is it Arcadia Group end? Billionaire CEO unable to pay suppliers, stores landlords or even his own employees!!! Sir Philip Green’s Arcadia Group is reportedly facing a winding-up order as it cancels payments to suppliers in a bid to stay afloat amid the coronavirus pandemic.
According to The Sunday Telegraph, court records show that Principle Systems, a subsidiary of marketing company Principle Global, has filed a winding-up petition against the billionaire’s retail empire.
Meanwhile according to the Sunday Times, Arcadia could serve notice on landlords to walk away from many of its 550 stores this week.
A letter seen by The Sunday Telegraph indicated that Arcadia “reserves its right” to cancel orders even when the stock is on its way or already in its distribution centres.
It has been previously reported that Arcadia informed suppliers that payment terms would be extended by 30 days due to the pandemic, meaning payments would now be made withing 90 days, not 60.
The firm has also already demanded rent cuts from landlords due to the store closures paused payments to its pension fund, which had a deficit of up to £727 million in 2018.
Last week Arcadia Group put 14,500 out of its 16,000 total workforce on taxpayer-funded furlough under the government’s Coronavirus Job Retention Scheme.
The retail giant said all store staff had been furloughed since March 21, and “the majority” of its headquarter employees will follow suit from April 5.
Arcadia’s senior leadership team and board will also take salary cuts of between 25 per cent and 50 per cent, while group chief executive Ian Grabiner has elected to receive no salary or benefits until the pandemic ends.
Employees were also previously informed that it would end fixed-term employment contracts early.
The pandemic has exacerbated Arcadia’s problems after several years of decline and a belated entrance to the online retail market.
The firm was also the middle of a major restructure through a CVA, which has already seen it permanently shut down at least 12 stores since the Christmas trading season.
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