Under-threat UK Retailer Arcadia Rejects Emergency Loan Offer
British clothing retail group Arcadia, ravaged by coronavirus lockdowns and fierce online competition, on Monday rejected an emergency loan offer, even as it teeters on the brink of bankruptcy
London, (APP - UrduPoint / Pakistan Point News - 30th Nov, 2020 ) :British clothing retail group Arcadia, ravaged by coronavirus lockdowns and fierce online competition, on Monday rejected an emergency loan offer, even as it teeters on the brink of bankruptcy.
British media reported the group was poised to enter administration, in what would be another body blow to Arcadia boss Philip Green and the Covid-hit British retail sector.
Green, 68, who was once dubbed "the king of the high street", saw his reputation hit from the high-profile collapse of retailer BHS four years ago.
"Frasers Group were not given any reasons for the rejection, nor did Frasers Group have any engagement from Arcadia before the loan was declined." Ashley, who also owns English Premier League side Newcastle United, bought the troubled department store chain House of Fraser in 2018 and runs the sports Direct brand of shops.
Frasers had earlier said it "would be interested in participating in any sale process" should Arcadia fail to secure emergency funding and go into administration.
Arcadia announced on Friday that the Covid-19 pandemic has had a "material impact" on trading due to enforced closures during lockdowns that have devastated retail across Britain.
It said it was working on "a number of contingency options" to secure the future of its brands.
- Pension scheme - Back in 2015, Green sold retailer BHS for just 1 to Dominic Chappell, a former bankrupt businessman with no retail experience.
BHS then collapsed one year later, resulting in 11,000 job losses and leaving a massive 571-million deficit in its pension fund.
British lawmakers on Monday called on Monaco-based Green to cover the shortfall in the Arcadia pension fund, which is estimated to run as high as 350 million.
The head of parliament's cross-party Work and Pensions Committee, Stephen Timms, said Green should dip into his own pocket to ensure workers do not miss out.
Timms also said the pensions regulator should "do everything in its power to fight the corner of the pension scheme members".
The economic consequences also threaten to be dire. Last week, finance minister Rishi Sunak said the economy was set to contract 11.3 percent this year -- the worst in over 300 years.