Sir Philip Green’s Arcadia is on the verge of collapse, putting 13,000 jobs at risk and threatening an end to the billionaires high street reign.
Arcadia Group, which owns Topshop, Miss Selfridge, Dorothy Perkins, Wallis, Evans, Outfit and Burton, was struggling before the coronavirus hit and is set to seek protection from creditors after months of Covid shutdowns took their toll.
Rivals including Debenhams, Edinburgh Woollen Mill Group and Oasis Warehouse have all entered insolvency since the pandemic began.
The group is set to appoint Deloitte as soon as Monday Sky reports said, after talks with lenders over £30m in emergency funding failed to reach an agreement.
The group has more than 500 sites, many of which are closed under lockdown rules in England which end on 2 December.
It is understood that Green is considering a process known as a light-touch trading administration, in which management would retain control of the day-to-day running of the business while administrators seek buyers for all or parts of the company.
Industry watchers said Topshop and Topman would still attract interest from suitors but the smaller brands would be less appealing, with Boohoo, the online specialist, one of a few likely buyers of those assets.
During the first country-wide lockdown, Arcadia furloughed the vast majority of its 13,000-strong workforce across its outlets.
Staff at its shops in England have been placed back on the government's wage subsidy scheme though its stores in Wales, Scotland and Northern Ireland have now reopened.
Entrepreneur, Mike Ashley, who is behind Sports Direct, is said to be interested in all of Arcadia’s brands.
Arcadia has been suffering from heavy competition from new rivals such as Boohoo and Asos for some time. It follows years of underinvestment in online selling under Green’s stewardship.
The collapse of the group would leave a pension deficit estimated to be as much as £350m by John Ralfe, a pensions expert.
Last year, Tina Green, 71, the wife of Sir Philip and ultimate owner of Arcadia, pledged to pay an extra £100m into the funds over three years and signed over rights to property worth £210m. However, according to Raife, the fall in the value of retail property means a sale of those assets is unlikely to fill the pension black hole.
Arcadia underwent restructuring last year through a company voluntary arrangement (CVA). It agreed to shut 50 shops, secured a rent cut with landlords on property and struck a deal with the Pension Protection Fund to put money into the company's pension schemes.
At the time, the pension scheme deficit was estimated to be around £700m but the Sunday Times reported it is now £350m on a buyout basis.
Sir Philip and his wife Lady Cristina Green are worth £930m, according to the Sunday Times Rich List.
Much of their wealth is derived from a £1.2bn dividend payment Sir Philip took from Arcadia in 2005, two years after buying the business.
In recent years, Sir Philip faced controversy for selling off BHS, the former department store chain, for £1 to high-profile businessman Dominic Chappell. BHS went into administration a year later, with the loss of 11,000 jobs and a pension deficit of £571m.