Former ministers are calling for the government to intervene in Arcadia’s pension deficit, after Deloitte secured a £330m rescue deal for the retail group.
Former Labour leader and ex-Cabinet minister Ed Miliband called for intervention, tweeting that the family of Arcadia chairman Sir Philip Green had extracted the largest dividend in history from Arcadia, adding: “The least he can do is help plug the pension deficit with the proceeds of this sale.”
Former pensions minister Baroness Ros Altmann explained it is unlikely there will be any legal requirement for the Greens to put more money into the pension scheme. She said: “Trying to rescue the scheme is likely to be enormously expensive – possibly costing more than was required for rescuing BHS, where arguably there was some legal liability.”
This week, Deloitte, the administrators of the Arcadia Group, announced the sale of Topshop, Topman, Miss Selfridge and HIIT brands to ASOS. The sale will generate total proceeds of £330m for the benefit of creditors.
ASOS will acquire the brands, intellectual property and inventory. In addition, approximately 300 employees across design, buying and retail partnerships will transfer to ASOS. The transaction excludes the Topshop, Topman and Miss Selfridge store network which, as at 1 February, comprises approximately 70 leasehold sites.
As a result, over 70 stores will close where over 2,500 employees worked from. In recent weeks, 50 sites have already closed as a result of the pandemic.
According to Deloitte, the process to secure new owners for Burton, Dorothy Perkins and Wallis remains ongoing via “exclusive discussions with a potential purchaser.”
It has been reported that Sir Philip Green’s family is set to make £50m from the sale of Topshop, and that more than 1,000 suppliers to the retail chain are set to get less than one percent of the money owed to them. It has also been alleged that the retail empire fell into administration due to debts totaling £750m. Deloitte declined to comment on both reports.