The U.S. may be saying goodbye to Topshop/Topman stores in the near future, as the British brands’ floundering parent company struggles to ward off insolvency.
London-based Arcadia Group, owned by retail mogul Philip Green, announced on Wednesday that it would be closing 23 of its 566 stores in the U.K. and Ireland—and possibly the U.S.
The firm has undergone massive restructuring as sales have declined among its cadre of retailers, including Wallis, Miss Selfridge, Dorothy Perkins, Evans, Burton and Outfit.
Seven Company Voluntary Arrangements (CVAs) have been instigated, Reuters reported, which will allow Arcadia Group to stave off insolvency by striking a deal with its creditors.
Arcadia Group, like many of its British retail competitors, is facing a slowdown in business brought on by a confluence of factors. Consumer spending has cooled, while labor costs continue to rise. British businesses are paying higher property taxes than they have in previous years, Reuters reported, making the maintenance of expensive storefronts a burden.
Meanwhile, the popularity of online shopping continues to explode, drawing consumers away from the shops.
Popular fashion chain New Look and British department store Debenhams have also adopted CVAs to manage their debts and avoid closure.
As a part of the proposed deals, Arcadia is angling for a reduction in rental costs at its 194 U.K. and Ireland retail locations, asking that the terms of those leases be revised. The proposal will be subject to approval by creditors, according to Reuters.
The firm has already begun a process that may lead to the closure of its 11 Topshop/Topman stores in the U.S., though it has said it will continue to supply wholesale vendors in the States as well as maintain an online business.
Tina Green, the company shareholder and wife of owner Philip, has promised to funnel 50 million pounds ($63.4 million) of equity into Arcadia as part of the negotiation of the CVAs. She has also agreed to provide any landlords affected by the proposed rent decrease with an entitlement to a pro-rata share of 20 percent of any equity value in Arcadia, should it be sold at a future date. Landlords will also have access to a 40 million pound ($50.6 million) compromised creditor fund to mitigate their losses.