Retail giants Debenhams and Arcadia Group are both on the brink of collapse, putting more than 25,000 jobs at risk.
Sir Philip Green’s Arcadia, which includes the Topshop, Dorothy Perkins and Burton brands, has hired Deloitte as administrator after the pandemic “severely impacted” sales.
And now JD Sports has pulled out of rescue talks for troubled department store chain Debenhams – because it houses many Arcadia brands within its branches.
It was the last remaining bidder for Debenhams, which has been in administration since April, and has 12,000 staff and 15 stores in Scotland.
In a brief statement to the London Stock Exchange, the company said: “JD Sports Fashion, the leading retailer of sports, fashion and outdoor brands, confirms that discussions with the administrators of Debenhams regarding a potential acquisition of the UK business have now been terminated.”
Arcadia, which runs 444 stores in the UK and 22 overseas, said 9294 employees are currently on furlough.
It tumbled into insolvency on Monday evening, casting a shadow over its own 13,000 workers and 444 stores, however no redundancies have yet been announced.
Ian Grabiner, chief executive of Arcadia, said: “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.”
Retail trade union Usdaw has said it is seeking urgent meetings with Arcadia’s administrators in a bid to save jobs.
Dave Gill, Usdaw national officer, said: “Now that Arcadia is in administration, it is crucial that the voice of staff is heard over the future of the business and that is best done through their trade union.
“We are seeking urgent meetings and need assurances on what efforts are being made to save jobs, the plan for stores to continue trading and the funding of the pension scheme.
“In the meantime, we are providing our members with the support and advice they need at this very difficult time.”
The administrators said they will be “assessing all options available”, which could see brands sold off in separate rescue deals.
Arcadia will continue to honour all online orders made over the Black Friday weekend and will continue to operate all of its current sales channels.
Matt Smith, joint administrator at Deloitte, said: “We will now work with the existing management team and broader stakeholders to assess all options available for the future of the group’s businesses.
“It is our intention to continue to trade all of the brands, and we look forward to welcoming customers back into stores when many of them are allowed to reopen.”
It came as MPs called on Sir Philip to cover a shortfall in the pension scheme and urged the pension watchdog to fight on behalf of the group’s workers.
Stephen Timms, chairman of the Work and Pensions Committee, called on Sir Philip to stump up funds to fill the pensions black hole, which is estimated to be as large as £350m.
It is the latest retailer to have been hammered by store closures during the coronavirus pandemic.
Rivals including Edinburgh Woollen Mill Group and Oasis Warehouse have fallen into insolvency since lockdown measures were first imposed in March.