British clothing retail group and Topshop owner Arcadia, ravaged by coronavirus lockdowns and fierce online competition, on Monday entered into administration.
The group, which is comprised of eight of the UK’s best known high-street and fashion retail brands and owned by controversial businessman Philip Green, will be administered by the consultancy firm Deloitte, according to a press release.
The decision throws into uncertainty 13,000 jobs at the company's flagship stores including Topshop, Topman, Dorothy Perkins, Burton, Miss Selfridge, Evans and Wallis.
However, Deloitte has specified that there are no layoffs on the horizon and that trading will continue with a reopening of outlets this week as England emerges from a four-week coronavirus lockdown.
“This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders,"Arcadia's managing director Ian Grabine said in a statement.
"In the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe," he added referring to the loss of business during the pandemic.
Earlier Monday Arcadia rejected an emergency loan offer, despite its clear financial woes.
The need to take administrative measures will come as a 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 by the high-profile collapse of retailer BHS four years ago.
His bricks and mortar businesses have also suffered from increasing online competition from the likes of Boohoo and Asos.
- Declined lifeline loan offer -
But Arcadia turned down a £50-million ($67-million, 56-million-euro) loan from British sportswear tycoon Mike Ashley's Frasers Group to stave off bankruptcy.
"Frasers Group can confirm that Arcadia Group Limited have declined Frasers Group's offer of a lifeline loan of up to £50m," it said in a statement to the London Stock Exchange.
"Frasers Group were not given any reasons for the rejection," it added.
Ashley, who also owns English Premier League side Newcastle United and runs the Sports Direct brand of shops, bought the troubled department store chain House of Fraser in 2018.
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.
Speaking ahead of the administration announcement, Gordon Fletcher, of the University of Salford Business School, said Arcadia's failure would be a "significant blow to the high street" but that the issues in the group ran deeper than Covid.
Arcadia and its brands were paying the price of a "lack of focus on the consumer and its ability to keep pace with the changing expectations of retail".
- 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.
"There is unquestionably a moral case for the Green family to do the right thing and guarantee Arcadia's hardworking staff what is rightfully theirs, whatever happens this Christmas," he said.
Green, whose net worth was estimated at £930 million on this year's Sunday Times Rich List, last year paid £363 million to plug the gap in the BHS pension scheme.
The human fallout of the global pandemic has seen more than 58,000 deaths from some 1.6 million cases in Britain -- the worst in Europe.
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.
A three-month shutdown from late March forced non-essential retailers to close but even as businesses reopened from June, town and city centres remained virtually deserted.
The government ordered non-essential shops to close again in England on November 5 to try to cut infection rates as cases spiralled across the country.