Arcadia Group—or what’s left of it—now has a liquidator in place to oversee its fire sale in a last gasp for the onetime giant of British fashion retail.
Audit, accounting and consulting group Mazars has been appointed to manage the closure of 21 property, retail, design, development and holding companies that make up the remainder of the group.
Arcadia, owned by billionaire entrepreneur Sir Philip Green, collapsed into administration—the U.K.’s version of Chapter 11 bankruptcy—in November before Asos and Boohoo swooped in and rescued the company’s most popular brands.
Asos acquired the brands and inventory of high street retailers Topshop and Topman, alongside Miss Selfridge and HIIT, for a combined $452 million. Boohoo Group did the same for Dorothy Perkins, Burton and Wallis for $35.5 million. No stores were included in either transaction.
Deloitte, Arcadia’s administrator through the process, also sold off the fashion company’s plus-size Evans business to Australian retailer City Chic Collective for $31 million.
As part of the liquidation, Mazars is aiming to recover at least 30 million pounds ($41.5 million), largely from reconciling loans across the company and the closure of Arcadia’s businesses.
Her Majesty’s Revenue and Customs (HMRC), a non-ministerial department of the U.K. Government, is likely to be the main beneficiary of the liquidation, although it will not receive the full 44 million pounds ($60.8 million) it is owed.
Administrators to the main holding company of Arcadia Group have already recovered almost 250 million pounds ($345.5 million), largely from the Topshop sale to Asos that enabled a loan repayment.
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“The liquidation of the Arcadia companies is a large and complex undertaking, and our team will draw on its collective experience to maximize returns for creditors, including HMRC,” joint liquidator Adam Harris said in a statement. “Over the coming months our aim is to repay as much as possible of the group’s outstanding unpaid VAT (value-added tax) liability.”
Harris and Guy Hollander, the director of restructuring services at Mazars UK, are overseeing the liquidation process, which could take up to a year, according to the Financial Times.
One creditor, Sir Philip Green’s wife and part Arcadia owner Lady Tina Green, already received 50 million pounds ($69.1 million) as she was a secured creditor in the company. Green initially lent the group the 50 million pounds for a Topshop distribution center that has since been sold.
Secured creditors are likely to be repaid in full, and also include HSBC and the Bank of Scotland.
Unsecured creditors, which include Arcadia’s suppliers and utilities companies, will not be as lucky despite having combined claims of almost 1.8 billion total pounds (nearly $2.5 billion), according to FT, which indicated that these creditors would likely only get a fraction—approximately 10 percent—of what they were owed.
The full list of Arcadia Group companies being liquidated by Mazars includes: Arcadia Group Design & Development; Arcadia Group Holdings; Arcadia Group Retail; Arcadia Retail Group; Burton Property Trust; Burton Retail; Collier Finance; Dorothy Perkins; Dorothy Perkins Retail; Evans; G Clothing (Holdings); G Fashion; Matte Card Services; Montague Burton Properties; Montague Burton Property Investments; Redcastle Properties; Redcastle Investments; Taveta Investments; Taveta Investments (No.2); Topshop/Topman (Australia); and Wallis (London).
Arcadia’s downfall was just one of many apparel demises in the U.K. throughout the coronavirus pandemic. Already losing steam due to the presence of e-commerce players Asos and Boohoo as well as other successful adaptors like Next, Debenhams experienced a similar path to Arcadia despite its household name. Upon falling into administration and liquidating its stores, the 240-year-old retailer was acquired by Boohoo for 55 million pounds ($75 million).
In total, the U.K. saw nearly 10,000 retail stores permanently close in 2020, but extended lockdowns prevented non-essential stores from opening again until April 12.
Prior to its administration and ensuing brand sell-off, Arcadia Group employed over 13,000 staff.