The collapse of Philip Green’s British fashion group Arcadia was “incredibly sad news” but the government will support those affected, business secretary Alok Sharma has tweeted.

Sharma also points out that the administrators have a duty to file a report on director conduct with The Insolvency Service within three months, which will then determine whether a full investigation is required.

Sharma says he will keep a ‘very close eye’ on this process....

Arcadia’s collapse makes it onto the front pages of several of tomorrow’s newspapers.

The focus, understandably, is on the 13,000 jobs at risk, and worries about the state of Arcadia’s pension scheme.

The Guardian points out that retail tycoon Philip Green’s high street career ends in failure.

The Telegraph warns that thousands of pension savers face “a brutal hit to their retirement income”, should Arcadia’s pension scheme end up in the PPF lifeboat

The FT says Green’s Arcadia fashion empire has become the highest-profile retail victim of the pandemic.

The Times flags up concerns that Arcadia’s collapse could derail efforts to rescue Debenhams (as explained here)

Here’s retail analyst Paul Mitchell on Arcadia’s collapse tonight:

The UK’s tax authorities could miss out on substantial revenue because Arcadia collapsed tonight rather than surviving until tomorrow, points out Oliver Shah, business editor at The Sunday Times.

From Tuesday, these new Crown Preference rules will put HMRC ahead of unsecured creditors in an administration, and also ahead of those with ‘floating charges’ on assets such as stock.

That would increase HMRC’s chances of recovering VAT, national insurance and income tax owed, which could be substantial for a large company like Arcadia, at the expense of, for example, its suppliers.

Here’s our timeline of Philip Green’s career, from early days running a Mayfair discount store to the collapse of his retail empire tonight:

(including takeovers, the biggest payday in UK corporate history, a knighthood, luxury yachts and parties.... then the downturn in trading, the collapse of BHS, rising pension deficits, MPs voting to remove the knighthood, and finally the pandemic.)

Arcadia’s collapse into administration is an ignominious end to Sir Philip Green’s long career as a retail tycoon, points out Reuters tonight.

At the start of the millennium, Green was dominating British retail through deals to buy British Home Stores, then Arcadia - and two failed attempts to get Marks & Spencer too.

At his peak, Green was even honoured with a knighthood for his ‘services to retail’ (an award that looked increasingly ill-fitting as problems at BHS, then Arcadia, mounted).

As Reuters’ James Davey writes, Green was ‘riding high’ for years.

He was knighted by the Queen, feted by Prime Ministers Tony Blair and David Cameron, and rubbed shoulders with A-listers like supermodel Kate Moss and actor Sylvester Stallone.

Based in Monaco, home of the super-rich, he was oft snapped by paparazzi on his 100-million-pound superyacht, Lionheart, and even hired Beyonce to perform at his son’s bar mitzvah bash.

But Arcadia failed to adapt to fast fashion (Primark, H&), or to online (ASOS, boohoo), before the BHS debacle. He sold BHS for a £1 to former bankrupt Dominic Chappell - it went bust a year later, costing 11,000 jobs and leaving a pension black hole.

Reuters calls this the ‘hammer blow’ to Green’s reputation.

Lawmakers branded him the “unacceptable face of capitalism”, saying his greed and disregard for corporate governance led to the company’s demise.

They called for him to be stripped of his knighthood, while newspapers vilified and lampooned him as a fat-cat tycoon.

After the pensions regulator pursued him, Green wrote a cheque for 363m pounds in 2017 to help plug the BHS pensions fund hole.

But his reputation was irreparably damaged, and further tarnished when he was named in Britain’s parliament as having taken legal action to try to prevent publication of allegations of sexual harassment by him against Arcadia staff. He denies the allegations.

West Midland Mayor Andy Street (who used to run John Lewis), reminds us that Arcadia was once a ‘retail superpower’.

Street is also concerned about the future for Arcadia’s pension scheme, which has a deficit estimated at £350m.

As we reported earlier today, Work and Pensions committee chair Stephen Timms says the Green family have a “moral obligation” to those pensioners to plug the shortfall.

Timms has also written to to the Pensions Regulator seeking details on the status of the £385m package agreed between the regulator, rcadia Group and Lady Green last year.

But former pensions minister Ros Altmann has predicted that Arcadia’s scheme will end up in the UK pension lifeboat, the PPF. If that happens, those below retirement age would lose some of their entitlement (she estimates 10% to 20%).

Arcadia’s future had been uncertain for a couple of weeks, since Sky News reported that it was looking to borrow £30m to prop up the business.

Professor John Colley, Associate Dean of Warwick Business School, argues that Sir Philip Green could have provided more funding himself, rather than letting the group fall into administration.

But, after a long downward spiral, the end has arrived.

“If reports are to believed, Arcadia has gone into administration for the want of £30m. Sir Philip Green clearly does not feel it is worth funding that from his £1.7 billion fortune to save his reputation.

“Perhaps the various accusations of bullying and sexual harassment [which Green denies], dumping pension fund liabilities by selling BHS for a £1, and the recent creditors voluntary arrangement (CVA) has brought him to this point. CVAs rarely work for long and this looks to be no exception. They are usually just a stage on the path to administration.

Arcadia’s slump into administration tonight could be the end of an era for the high street, and a heavy blow to its 13,000 workforce at the end of a very rough year.

Paul McNamara of Channel 4 News points out that hundreds of shops, and some well-known brands, are at risk:

My colleague Joanna Partridge points out that Arcadia shops in England should be allowed to reopen later this week:

Sophie Gallagher of the Independent captures what brands like Topshop have meant to younger shoppers:

Joanna Bourke of the Evening Standard sums up the mood tonight:

Arcadia’s collapse into administration could be bad news for fellow struggling retailer Debenhams.

JD Sports had been lining up a rescue bid for Debenhams -- but, they’re well aware that Arcadia is Debenhams’ biggest concession holder, and an important source of sales.

The Sunday Times reported yesterday that JD Sports was having second thoughts about the deal, once it became clear that Arcadia was heading towards administration.

Julie Palmer, partner at Begbies Traynor, explains:

“While the Covid crisis has undoubtedly accelerated the company’s decline, in reality, the writing had been on the wall for Arcadia for some time after its competitors forged ahead with high profile online propositions that it simply failed to match.

All eyes will now be on the possible impact of the news on JD Sports’ proposed rescue deal for Debenhams, which surely now hangs firmly in the balance given how prominently Arcadia brands feature in its stores.”

Shares in JD Sports jumped almost 6% today, making it the top riser on London’s FTSE 100 index. That suggests City investors think the Debenhams deal may be off. They fell last week, when news of the possible deal broke.

Simon Underwood, business recovery partner at accountancy firm, Menzies LLP, agrees that Arcadia’s reliance on physical stores was its undoing.

He predicts that the group will be broken up, with some brands snaffled by online rivals.

“Today has seen the fall of one of the giants of the UK retail landscape and Sir Philip Green, the so-called ‘King of the High Street’.

“While the Group’s fate may have been sealed by pandemic-related financial pressures, its reliance on physical stores has long been its Achilles’ heel. This has prevented it from taking advantage of the e-commerce boom experienced over the last few months, in contrast to online-only competitors such as Boohoo and PrettyLittleThing.

With brands such as Topshop and Dorothy Perkins representing valued parts of the UK’s retail heritage, we will likely see such platforms such as Boohoo moving in to purchase the intellectual property and bolt it onto their established distribution networks.

Ian Grabiner, CEO of Arcadia, also blames the pandemic for Arcadia’s fall into administration tonight:

Grabiner says:

“This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders.

“The impact of the COVID-19 pandemic including the forced closure of our stores for prolonged periods has severely impacted on trading across all of our brands. Throughout this immensely challenging time our priority has been to protect jobs and preserve the financial stability of the Group in the hope that we could ride out the pandemic and come out fighting on the other side. Ultimately, however, in the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe.

2020 certainly has been an awful year for the high street, with many other retailers also struggling.

But.... retail experts have been pointing out today that Arcadia’s failure to really embrace internet retailing also led to today’s crisis. By not investing deeply in online, and trying to target younger shoppers, some brands struggled and it lost sales to the likes of Asos, Boohoo and PrettyLittleThing.

Matt Smith, Joint Administrator at Deloitte, says that the Covid-19 lockdowns has created a “critical funding requirement” at Arcadia -- adding to the existing challenges facing the high street.

“Arcadia sits at the heart of the High Street, and has been striving to combat the impact of COVID-19 throughout this year. Now the effect of the lockdowns, combined with broader challenges facing bricks and mortar retailers, have resulted in a critical funding requirement for the Group and today’s administration.

Jack Dromey MP, Labour’s shadow pensions minister, has tweeted that Philip Green has a ‘moral duty’ to protect Arcadia’s pensioners.

The futures of around 13,000 Arcadia staff are still hanging in the balance tonight, after the company turned down Mike Ashley’s £50m emergency loan offer today.

The broader picture in retail is bleak too, with a new report showing that more than 158,000 jobs in UK retail have been lost so far this year.

The Evening Standard has the details:

Data from the Centre for Retail Research (CRR) compiled for the Evening Standard, calculates 158,064 UK retail jobs were lost between January and November 29.

These figures do not include Arcadia which continues to trade.

CRR’s figures look at a range of reasons for job losses this year, such as companies going into administration and closing stores via a Company Voluntary Arrangement restructuring model.

A number of firms have also reduced employee numbers as part of rationalisation programmes.

Professor Joshua Bamfield, director Centre for Retail Research, said: “Retail was already in trouble before Covid, but the first lockdown was a hammer blow for the sector that deprived many viable businesses of revenue for three months.”

Dr Jonathan Reynolds, associate professor in retail marketing at Oxford Saïd Business School, says Philip Green’s ‘increasingly tarnished’ reputation has held Arcadia back, and deterred top managers from working with him.

Arcadia failed to compete on either price or experience. And whilst the increasingly tarnished reputation of Sir Philip might not have been immediately associated by consumers with the Arcadia brands, it almost certainly affected the group’s ability to attract and retain senior talent.

“Ultimately, retailing has always been about change and it seems that Arcadia Group will be the next casualty of this relentless and unforgiving process.”

Two years ago, Jane Shepherdson, the former brand director at Topshop, described the tycoon as a “bully” and alleged that Green’s behaviour in the workplace was “worse than most”.

Shepherdson said.

“There’s no question he was a bully, everyone knows he was a bully,”

Shepherdson was speaking a week after Guardian reported in October 2018 that several employees of Green who alleged the tycoon had sexually harassed or bullied them were given enormous seven-figure secret payouts to settle their claims.

Green has repeatedly, categorically, denied allegations that he sexually harassed or racially abused staff.

But his reputation for swearing is not disputed, as my colleague Rupert Neate recalls...

In 2003 Green described the Guardian’s then financial editor Paul Murphy – born in Oldham and raised in Portsmouth – as a “fucking Irishman” who “can’t read English”. In the short conversation with the Guardian, which the newspaper printed in full, he said the words “fuck” or “fucking” 14 times.

Challenged later about his bad language, Green said: “Do I say fuck off? “Yes, if people don’t behave themselves,” according to a profile in Tatler.

The best hope for Arcadia’s brands to survive is to break the company up, says Chloe Collins, senior retail analyst at GlobalData.

But some brands, such as Topshop, will be in greater demand than others -- and if an e-commerce player such as boohoo buys it, then the stores would probably still close.

Topshop and Topman will undoubtedly attract the most interest from potential buyers. Although their reputation as fashion leaders has dwindled since their heyday, as they have lost market share to more agile young fashion retailers such as boohoo and ASOS, they still have potential and would be missed by those who have grown up with the brands. The boohoo group is likely to be keen to snap them up – Topman would really boost its menswear offer, which has always lagged behind boohoo’s women’s brands, and Topshop could benefit massively from boohoo’s social media prowess and influencer relationships. However, any deal involving boohoo would most likely result in the closure of all stores, and these brands would be sorely missed from high streets. Miss Selfridge could be a good fit for boohoo though, however it would need to be revived with a niche selling point to differentiate it from boohoo’s other brands.

Next and M&S have reportedly shown interest in bidding for some of Arcadia’s brands, particularly Dorothy Perkins and Burton which would have the most appeal among their target demographics. However, Burton’s ranges which mainly focus on formalwear have been largely redundant throughout the pandemic as consumers work from home and social events have been cancelled. Wallis and Evans may find themselves without a buyer as these brands are the most tired and uninspiring. Wallis lacks a unique selling point and also suffers from a focus on workwear, whereas Evans has lost significant as a plus-size specialist as more fashion brands have expanded their ranges to cater to these shoppers.”

Ros Altmann, the former pensions minister, has bad news for Arcadia pension scheme members.

She doesn’t believe that the situation is comparable to the BHS pensions scheme - where Philip Green eventually agreed to pay £363m to cover its deficit, having sold the group for £1.

With the Arcadia scheme, the Green family have already reached a settlement (which is why the Work and Pensions committee are urging the Pensions Regulator to fight for Arcadia workers).

Altmann writes:

This situation is different from the furore which surrounded the insolvency of BHS.

In that situation, the Pensions Regulator had concerns about the lack of funding for the BHS pension scheme over many years and the fact that the business had been offloaded without plans in place to fix the deficit of over half a billion pounds.

In the case of Arcadia, however, the owners have reached an agreed schedule of deficit repair contributions, that was to see £100million paid in over three years, half of which has already been paid. Even if a further £50million is paid next year, as per the guarantee arrangement, the scheme would still not escape the Pension Protection Fund.

As such, Altmann reckons Arcadia’s scheme will end up in the Pension Protection Fund, meaning that many scheme members would lose some of their entitlement.

The sad reality is that Arcadia’s pension scheme is more likely to enter the PPF, reduces most members’ pensions by between 10% and 20%, which will be an added blow to the thousands of workers who may also lose their jobs.

ITV News’s Joel Hills has tweeted Arcadia’s letter to Frasers, rejecting Mike Ashley’s offer to lend them £50m.

With Ashley’s offer rejected, and attempts to raise £30m failing last week, Arcadia appears to be running very short of options, and time....

Here is the full letter which Work and Pensions Committee chair Stephen Timms sent to the Pensions Regulator’s CEO, Charles Counsell today, urging him to protect Arcadia’s pension scheme members.

Dear Charles,

I am writing to you following the recent news about the Arcadia Group. During a global pandemic and with many scheme members facing possible job losses, I know that you will agree that the interests of pension scheme members should be front and centre.

Last year you wrote to my predecessor outlining a £385m package agreed between the Pensions Regulator, the Arcadia Group and Lady Green. This included a £100m guarantee from Lady Green, annual payments of £25m from the Arcadia Group and additional asset security.

I would be grateful if you would be able to answer the questions below:

• Your letter of 3 July to the previous Chair of the Committee stated that “the £100m is guaranteed to be paid regardless of what happens to AGL in the future”. Given that it now seems that Arcadia Group Limited is unable to make any further deficit reduction contributions to the scheme, when would you expect this guarantee to be paid?
  
  
• Have the deficit reduction contributions of the Arcadia Group schemes been affected by the guidance you introduced for defined benefit schemes funding and investment during the Covid-19 pandemic?
  
  
• The agreed package included assets secured for the scheme valuing £210m. I understand that the Pensions Act 2004 will limit your ability to comment on the additional asset security, but are you able to give us any indication of what assurances scheme members will be given on when and if these assets will be transferred to the schemes?
  
  
• What lessons will you be applying from the Regulator’s experience with the BHS schemes?

My Committee is currently taking evidence on pension scams. We have heard how scammers exploit member uncertainty to access people’s savings. In a time of near unprecedented uncertainty, how will you be applying the lessons of the Rookes Review to ensure that Arcadia scheme members are not tempted to put their savings in the hands of fraudsters?

Finally, you published your guidance on defined benefit superfunds earlier this year. What reassurances are you able to give to scheme members should the strength of that guidance be tested in the coming weeks?

I look forward to hearing from you.

Yours sincerely,

Stephen Timms

Dr Gordon Fletcher, of the University of Salford Business School, says that Arcadia - and its staff - are paying the price for Philip Green’s reluctance to invest in its brands amid the move to online shopping.

Arcadia is personalised around its chairman, Philip Green. This is a textbook case study into the impact that different styles of leadership and management can have on a business. Arcadia’s brands have been slow to diversify into other countries or to make an exciting online offering - although Topshop’s 80% discounting on Cyber Monday is a headline in its own right - and have not kept pace with the contemporary fashion offerings of the online-only competitors.

“As a private company the focus appears to have been on the short term by reaping of dividends during profitable periods with no investment back into the brands themselves. Consumers do increasingly expect conversations and interaction with the brands that they want. If that investment has not been made to let that conversation happen then loyal consumers will look elsewhere. Arcadia and its brands are now paying the price for this lack of focus on the consumer and its ability to keep pace with the changing expectations of retail.”

Getting back to Arcadia, and the Money Advice Service have tweeted some information for customers.

This includes:

• Take back any unwanted good, or returns, as soon as possible, and avoid buying gift cards, just in case.
• Keep paying off any store credit cards - missed payments still affect your credit rating
• Spend gift vouchers as soon as you can - as they would be a low priority in an administration

In other non-Arcadia news, president-elect Joe Biden has officially nominated former Federal Reserve chair Janet Yellen as the next US Treasury Secretary.

Economists have predicted that Yellen will work closely with the Fed to push through more stimulus measures to support the US economy, which could have a positive knock-on impact on other economies.

That’s also likely to weigh on the dollar, which has hit a two and a half-year low today (just as bitcoin hits that record high).

Yellen seems to have a new Twitter account too, where she’s promising to help rebuild the American dream....

Pensions expert John Ralfe has outlined the situation regarding Arcadia’s pensions scheme on Sky News.

Last year Lady Green agreed to put in £100m over two years, as part of a deal with the pension’s regulator. Ralfe thinks £50m has already gone in, with the other £50m still owed even if the company is in administration, he says.

That could take the deficit down to £300m, he explains.

The 2019 deal also gave the pension fund security over the large flagship Topshop store on Oxford Circus, and another smaller property, up to £185m.

While that was great, he says, it was also a second mortgage, and Ralfe fears that it won’t actually provide any funding for pensioners.

Once you’ve taken into account the fall in retail property values over the last couple of years, very significant for all the reasons that we know, and then you take off the first mortgage, I doubt very much whether there’s anything for the pension scheme.

Then it’s a question of how much can be raised by selling Arcadia’s individual brands.

Ralfe’s guess is that we could be left with a deficit of £200m to £250m to keep the 10,000 pension scheme members whole.

They would move to the UK’s pension lifeboat, the Pension Protection Fund, which pays compensation of up to 90% to members who haven’t reached retirement age yet.

Ralfe explains that scheme members would ultimately end up with “something like 75% or 80% end-to-end” of their full pension promise.

Here’s the clip:

Much of the Green family fortune can be traced back to 2005, when the Arcadia owner effectively awarded himself a £1.2bn pay cheque - the biggest in UK corporate history.

Three years after buying Arcadia, Philip Green decided to pay out a £1.3bn dividend. Some £1.17bn of the money went to his wife Tina, who owns 92% of the company - and as she lived in Monaco, it wasn’t taxed in the UK.

Although Arcadia had grown its profits by 10% that year, the dividend was financed by a seven and a half year loan to Arcadia from a banking syndicate.

Green insisted at the time that the debt was sustainable, as my colleague Julia Finch reported at the time:

The cash will be coming from a seven and a half year loan to Arcadia. “It is senior debt, not rinky-dinky funny money. It is plain vanilla, not chocolate or raspberry,” said the tycoon, who also owns Bhs.

“It is affordable and it is not over-aggressive. It leaves the business with plenty of opportunities to grow

The Daily Telegraph called the dividend ‘jaw-dropping’, adding:

Green and his family own 92 per cent of Arcadia, with the remaining 8 per cent owned by HBOS, the bank. The bumper payout is all the more staggering given that at the time of the 2002 deal only £10m of pure equity was invested in Arcadia - £9.2m from Green and £800,000 from HBOS.

Green’s £1.2bn dividend represents a return on his initial investment of 130 times. “We have made 130 times our money and we are still playing,” he says gleefully.

That money helped finance luxuries such as those three yachts, multimillion pound parties in The Maldives, and other extravagancies that must rile employees worried about their future.

And £1.2bn would have certainly helped Arcadia adjust to the new challenges from online shopping - not to mention fix the estimated £350m black hole in the pension fund.

Shares in some of Arcadia’s rivals are rising this morning, as the City anticipates the group’s collapse and break-up.

High street rival Next has gained 2.8%, amid forecasts of less competition on the high street, while JD Sports are still up 6.5% on predictions that it might now drop its pursuit of Debenhams.

Online fashion group Boohoo, who could be interested in buying brands such as Topshop, are 5.5% higher.

Oscar Williams-Grut of Yahoo Finance points out that analysts are predicting Arcadia’s break-up, with rivals snaffling some assets at bargain prices.

“Arcadia is a bit like an old car — there are lots of assets under the bonnet that are very good and work quite well,” said Richard Hyman, a retail industry analyst. “With the right leadership and the right ownership you could squeeze a bit more out of it.”

Hyman said there would be “no shortage of suitors” for TopShop and said other Arcadia brands would be “ripe for someone like Boohoo”.

If Arcadia does collapse into administration, then the timing will be crucial for its creditors - including the UK tax authorities.

The UK could lose out on substantial revenue if the group goes into administration today, rather than hanging on into December.

That’s because new “Crown Preference” rules come into force on Tuesday, which will see HM Revenue & Customs leapfrog above some other creditors (such as Arcadia’s suppliers) in the queue to recover money owed.

The change, announced back in 2018, are meant to give HMRC a better chance of recovering any VAT, national insurance and income tax owed by a failing company. It means HMRC would rank above unsecured creditors, and those holding a ‘floating charge’ (secured against a non-fixed asset such as company stock.)

The FT has a good explanation:

Fixed-charge creditors, or the highest-ranked and who include Sir Philip’s wife Tina, are unaffected by the crown preference change. They will continue to rank at the top of the list for repayment irrespective of the timing of any administration — although that does not guarantee they will recoup all of their loans.

As part of the company voluntary arrangement agreed with creditors last year Lady Green — the ultimate legal owner of Arcadia — loaned the group £50m, secured on one of the group’s distribution warehouses, and provided £40m to compensate landlords and £10m of additional equity.

In many insolvencies the pension fund is also classed as an unsecured creditor but, under an agreement struck last year, Arcadia’s pension scheme has fixed-charge claims on various assets in the group. Lady Green has also agreed to provide £100m of extra cash for the fund.

Here’s the Press Association’s latest update on the Arcadia situation:

Plans for an emergency multimillion-pound loan to Sir Philip Green’s struggling Arcadia Group have reportedly fallen through.

Sir Philip’s retail empire, which includes the Topshop, Dorothy Perkins and Burton brands, has been revealed to be on the brink of collapse with around 15,000 jobs at risk.

Senior sources at the company have told the BBC they do not expect a last-minute rescue deal, which had been flagged by Mike Ashley’s Frasers Group.

Arcadia Group will enter administration on Monday, the broadcaster said, with Deloitte to be appointed as administrators in the coming days.

The offer from Frasers Group, which runs Sports Direct and House of Fraser, amounts to a £50m loan, Mr Ashley’s company confirmed.

Frasers Group said: “The company can confirm that it has made an offer and provided draft terms to the Arcadia Group for a loan of up to 50 million and is now awaiting a substantive response.

“Should the Company and the Arcadia Group’s efforts to agree an emergency funding package fail and the Arcadia Group enter into administration, the company would be interested in participating in any sale process.”

Sky News quoted Chris Wootton, Frasers’ chief financial officer, as saying: “We hope that Sir Philip Green and the Arcadia Group will contact us today to discuss how we can support them and help save as many jobs as possible.”

But.. while consumer borrowing shrinks at a record pace, the UK housing market remains red hot.

The Bank of England reports that mortgage approvals hit a 13-year high last month. Lenders signed off 97,500 new mortgages in October, making it the busiest month since September 2007 (just before the credit crunch....)

The rush to benefit from the stamp duty holiday, and pend-up demand after the spring lockdown, have both fuelled the market in recent months.

Estate agents also report strong demand for larger houses away from big cities, with families keen on more space after months cooped up together in the lockdown.

Here’s our news story on Mike Ashley’s offer of a £50m emergency loan to Arcadia (and his interest in any sale process should the business collapse).

Mike Ashley’s Frasers Group could try to buy some Arcadia brands if the company does collapse, explains Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown:

If Arcadia Group does go into administration, Frasers Group is expected to go picking over the carcass, potentially to give a new lease of life to brands like Top Shop or Miss Selfridge.

But Mike Ashley has already been on an expansion drive this year, buying into Hugo Boss and increasing the company’s stake in Mulberry, so there is some concern about whether Frasers Group can afford to go on another shopping spree right now.

Boohoo, the online clothes retailer, could also be interested in a brand such as Topshop, she adds:

Given the accelerated shift to digital brought about by the pandemic, the survival of iconic brands like Top Shop is going to rely heavily on improving its e-commerce offering, to enable them to stand a chance in the highly competitive online fashion world.’’

But taking brands online-only would not save jobs in Arcadia’s stores around the UK.

While Arcadia teeters, Sir Philip Green has been based aboard his super-yacht, Lionheart, docked in Monaco’s harbour.

Over the weekend, the Daily Mail ran a photo of Green “soaking up the sun on his £100 million superyacht under a fur-lined blanket” last week,

A BBC reporter in the principality said yesterday there was no sign of Sir Philip on deck, but “crew members were busy cleaning the 90m-long vessel”.

Green’s opulent lifestyle will intensify pressure to tackle the £350m pensions black hole at Arcadia, especially as he’s reportedly planning a festive break at an exclusive Indian Ocean resort in the sunny Maldives.

Our wealth correspondent, Rupert Neate, writes:

Seeking to avoid the coronavirus pandemic, Green has spent most of the past year permanently onboard the 300ft yacht, which features a helipad, pool, 15 crew cabins and room for 12 guests. It is the third yacht that Green has commissioned from Italian shipbuilder Benetti Yachts.

If Green pushes ahead with the trip to the Maldives, local people are likely to remember him from his previous visits. He picked the Indian Ocean archipelago as the location for his 55th birthday party, which lasted five days, and reportedly featured a troupe of topless dancers and performances by George Michael and Jennifer Lopez. It was said to have cost about £20m.

So many of his famous friends – including Kate Moss and the Vogue editor Anna Wintour – arrived by private jet that the local airport authorities refused to allow any more to park. The party for his 60th, billed as PG60, was held at the Rosewood Mayakoba resort in Mexico, with performances from Robbie Williams, Stevie Wonder and the Beach Boys. His presents have included a £7m Gulfstream jet and a £250,000 gold Monopoly set.

Arcadia was already in trouble before Covid-19 hit the retail sector. Back in 2019, it avoided collapse after creditors backed a rescue plan that involves the closure of 50 stores and 1,000 job losses.

Business consultant Kate Hardcastle told the BBC that there are three reasons the company is struggling:

1) It lost relevance with consumers, who are getting savvier and very social media oriented. They want conversations with brands, and Topshop has ‘dipped out’ of that.

2) The market has been disrupted by discount firms such as Primark, or online through companies such as Boohoo.

3) Arcadia’s ‘trader mentality’ --- the idea of buying stock cheap, stacking it high, selling it for a profit -- is now outdated.

She adds that firm’s success was also blighted by Philip Green hitting the tabloids ‘for the wrong reasons’ (eg buying a third luxury yacht when former chain BHS was in collapsing)

My colleague Zoe Wood has analysed how Sir Philip Green’s empire, which once dominated the high street, is now teetering on the edge of administration.

The 68-year-old businessman has been trying to extricate himself from Arcadia without loss of face for some time. The company only narrowly avoided administration last year when landlords backed a restructuring plan that involved closing 50 shops and shedding 1,000 jobs.

In the coming days Arcadia is expected to enter “light-touch” trading administration, which means management retains control of the day-to-day running of the business while administrators seek buyers for all or parts of the company. Struggling department store chain Debenhams took this route in April, although a rescue deal is still to be finalised.

“Green was one of the leading retailers of the time,” said a senior analyst who declined to be named. “But times have changed and he hasn’t moved with them. Topshop used to be a fashion icon, with the Kate Moss look and so on. It was a big deal.”

But unlike international rivals such as H&M and Zara owner Inditex, Arcadia did not pursue major overseas openings, apart from a failed attempt by Topshop to break into the US and China, and critics say Green failed to invest in the business.

So with online rivals now dominating the sector, time could finally be up for the bruising businessman-celebrity...

Green’s abrasive style didn’t win him many friends in the boardroom, but it has won grudging respect. “He is one of the best dealmakers I’ve seen,” recalled one senior retailer.

I don’t think he is a particularly good retailer; he is good at buying and selling. He ended up being a victim of himself. When you want to screw everybody over all the time … nobody wants to buy anything from you.”