490 Irish-based retail jobs in companies including Topshop remain in serious jeopardy after fashion retailer Next withdrew from negotiations to purchase the collapsed Arcadia Group.
The UK group employed 13,000 staff in 444 stores via brands including Topshop, Topman, Dorothy Perkins, Burton, Miss Selfridge, Evans and Wallis.
It went into administration in the UK before Christmas, due to pressure from the shift to online sales and the pandemic.
Since then, the UK administrators Deloitte have been attempting to find a buyer for the business.
The Irish operation was placed in liquidation, but the joint liquidators here – Ken Fennell and James Anderson of Deloitte – had kept the stores open over Christmas – until the latest lockdown – to maximise the value of the stock for creditors.
It had been hoped that 487 jobs in the 14 Irish-based stores and other concessions could be saved if the Irish stores were sold as part of the UK rescue operation.
But informed sources said workers and creditors will have to wait until late next week for an outcome on the UK sales process.
The Irish Arcadia operation is a separate entity, but the valuable intellectual property, online and leasehold assets are owned by the UK group.
Informed sources said that even if the Arcadia Group and/or its intellectual property is sold, it is unclear what the buyer’s position would be regarding the Irish operation.
However they voiced pessimism about the prospect of all workers retaining their jobs.
They confirmed that the stock in the 14 Irish-based stores is the main asset, and cautioned that in the current climate, there is “no value” in the leaseholds for the various shop premises.
Mandate trade union official Jonathan Hogan, who represents the Arcadia workers, said the liquidators had pledged to revert to them as soon as possible when they get confirmation regarding the prospects of a purchase.
He highlighted the stress for workers, who have now been laid off on the Pandemic Unemployment Payment due to the latest lockdown, as the uncertainty about their jobs continued.
Next had been bidding in conjunction with American hedge fund Davidson Kempner, but withdrew from those negotiations, with Reuters reporting they had been “unable to meet the price expectations of the vendor”.
Other potential bidders reportedly considering taking over some or all of Arcadia’s operations include retailers Boohoo, the Frasers Group, and JD Sports in a partnership with American retail giant Authentic Brands.
Chinese online retailer Shein is also reported to have tabled an offer for Topshop and Topman.
Informed sources said it was understood that there were now two bidders, and expect a final outcome “late next week”.
When the liquidators were appointed, the High Court heard it was hoped the Irish operation could be sold as part of an overall sale of Arcadia, as the Irish companies could not operate independently of their UK parent.
The court was told the impact of the pandemic on the Irish operation had been particularly severe, because stores had been closed for 23 weeks, with revenues plummeting by up to 60%.
Because online sales were carried out through UK entities, the Irish companies did not generate any income from those sales.
All four companies involved in the liquidation – Arcadia Group Multiples Ireland Ltd, Topshop/Topman Ireland Ltd, Wallis Retail Ireland and Miss Selfridge Retail Ireland, had made losses in the financial year to the end of August 2020, and there was a limited likelihood of realising inter-group debts due because of the insolvency.
Last month, the UK administrators agreed to sell Arcadia’s plus-size brand Evans to Australian firm City Chic Collective for €23m.