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Arcadia staff face uncertainty after 'tragic' collapse into administration – business live JD Sports pulls out of Debenhams rescue talks after Arcadia's collapse – business live
(32 minutes later)
Rolling coverage of the latest economic and financial newsRolling coverage of the latest economic and financial news
The Financial Times reports that “Debenhams is likely to be liquidated and broken up”, now that JD Sports will not proceed with a bid.
A liquidation would put Debenhams 12,000 workers jobs at risk, just a few weeks before Christmas.
The FT adds:
Debenhams has been in a ‘light touch’ administration since April - a new mechanism that lets company directors file for administration but retain day-to-day control of their business too.
The BBC’s Ben Thompson fears that JD Sports’ decision to terminate talks could be the ‘end of the road’ for Debenhams:
The Daily Mirror’s Graham Hiscott has heard that Arcadia’s collapse was the ‘final straw’ -- with JD Sports investors already concerned about the prospect of taking over Debenhams.
Caxton FX analyst Michael Brown fears the high street is being ‘decimated’ this week:
Newsflash: JD Sports has just confirmed that it has broken off talks with Debenhams about a possible rescue deal.
The move places the UK department chain’s future in serious doubt, as its administrators have been seeking a buyer for several months.
In a brief statement to the City, JD Sports says:
This puts thousands more jobs at risk across the UK high street, following the collapse of Arcadia (Debenham’s biggest customer) last night.
As my colleague Sarah Butler wrote last night:
In other news... UK house prices have risen at the fastest rate in almost six years.In other news... UK house prices have risen at the fastest rate in almost six years.
Prices have jumped 6.5% in the last year, Nationwide reports, with properties in national parks attracting a higher premium as some people look to escape the city...Prices have jumped 6.5% in the last year, Nationwide reports, with properties in national parks attracting a higher premium as some people look to escape the city...
Michael Gove has also refused to say whether Philip Green should use his fortune to repair the deficit in Arcadia’s pension scheme.Michael Gove has also refused to say whether Philip Green should use his fortune to repair the deficit in Arcadia’s pension scheme.
He told BBC Breakfast that there are “people better placed than me” to judge the right thing to do, “in order to do right by all those who work for Arcadia”.He told BBC Breakfast that there are “people better placed than me” to judge the right thing to do, “in order to do right by all those who work for Arcadia”.
Sir Ian Cheshire, former chairman of Debenhams, told the BBC this morning that Debenhams and Arcadia have both been ‘caught in a straitjacket’.Sir Ian Cheshire, former chairman of Debenhams, told the BBC this morning that Debenhams and Arcadia have both been ‘caught in a straitjacket’.
Asked about fears that JD Sports will abandon its rescue of Debenhams today, threatening 12,000 workers’ future, Cheshire says:Asked about fears that JD Sports will abandon its rescue of Debenhams today, threatening 12,000 workers’ future, Cheshire says:
But he says it’s not a surprise that Arcadia’s collapse would hurt Debenhams, as they’re “both each other’s biggest customers”.But he says it’s not a surprise that Arcadia’s collapse would hurt Debenhams, as they’re “both each other’s biggest customers”.
And they both faced the same problem:And they both faced the same problem:
Cheshire, a retail veteran, also predicts that Arcadia’s brands will attract interest from other retailers.Cheshire, a retail veteran, also predicts that Arcadia’s brands will attract interest from other retailers.
Michael Gove, Minister for the Cabinet Office, has pointed out that ‘missteps’ by Arcadia’s management contributed to its collapse.Michael Gove, Minister for the Cabinet Office, has pointed out that ‘missteps’ by Arcadia’s management contributed to its collapse.
Speaking on Sky News this morning, Gove said Arcadia’s story was tragic:Speaking on Sky News this morning, Gove said Arcadia’s story was tragic:
However, Gove also blamed the unprecedented pressures on the UK high street under the pandemic, and didn’t identify which management he had in mind.However, Gove also blamed the unprecedented pressures on the UK high street under the pandemic, and didn’t identify which management he had in mind.
Q: Why does the government feel Sir Philip Green has mismanaged Arcadia?Q: Why does the government feel Sir Philip Green has mismanaged Arcadia?
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Thousands of Arcadia staff have woken up to an uncertain future after Sir Philip Green’s retail empire fell into administration last night.Thousands of Arcadia staff have woken up to an uncertain future after Sir Philip Green’s retail empire fell into administration last night.
The group behind high street names like Topshop, Miss Selfridge, Burton and Evans became the biggest retail casualty since the pandemic began.The group behind high street names like Topshop, Miss Selfridge, Burton and Evans became the biggest retail casualty since the pandemic began.
Deloitte are now in control of the company, whose problems - from a lack of investment to a failure to adapt to the online shopping world - predate Covid-19.Deloitte are now in control of the company, whose problems - from a lack of investment to a failure to adapt to the online shopping world - predate Covid-19.
Deloitte plan to keep stores running while they look for “one or more buyers”, which means branches in England should reopen tomorrow when the lockdown ends. It also suggests the group could be broken up, with some of its brands acquired by rivals.Deloitte plan to keep stores running while they look for “one or more buyers”, which means branches in England should reopen tomorrow when the lockdown ends. It also suggests the group could be broken up, with some of its brands acquired by rivals.
So for 13,000 staff, it’s an extremely worrying turn of events in the run-up to Christmas.So for 13,000 staff, it’s an extremely worrying turn of events in the run-up to Christmas.
Usdaw, the retail trade union, says it is seeking urgent meetings with Arcadia’s administrators in a bid to preserve jobs.Usdaw, the retail trade union, says it is seeking urgent meetings with Arcadia’s administrators in a bid to preserve jobs.
Dave Gill, Usdaw national officer, said:Dave Gill, Usdaw national officer, said:
Arcadia’s collapse also raises fears that staff could lose a slice of their pensions, given there is a deficit of perhaps £350m in its pension scheme.Arcadia’s collapse also raises fears that staff could lose a slice of their pensions, given there is a deficit of perhaps £350m in its pension scheme.
Pressure is on Sir Philip Green to clear the shortfall.Pressure is on Sir Philip Green to clear the shortfall.
As my colleague Nils Pratley writes:As my colleague Nils Pratley writes:
Arcadia’s collapse could also have a very damaging impact on the wider UK retail space, with analysts estimating it could owe its suppliers up to £250m.Arcadia’s collapse could also have a very damaging impact on the wider UK retail space, with analysts estimating it could owe its suppliers up to £250m.
It also threatens to derail JD Sports’ rescue bid for Debenhams, as some Arcadia brands, such as Miss Selfridge and Dorothy Perkins, are sold at concessions within Debenhams stores, providing an estimated £75m of sales.It also threatens to derail JD Sports’ rescue bid for Debenhams, as some Arcadia brands, such as Miss Selfridge and Dorothy Perkins, are sold at concessions within Debenhams stores, providing an estimated £75m of sales.
The agendaThe agenda
9am GMT: Eurozone manufacturing PMI for November9am GMT: Eurozone manufacturing PMI for November
9.30am GMT: UK manufacturing PMI for November9.30am GMT: UK manufacturing PMI for November
10am GMT: Eurozone inflation for November10am GMT: Eurozone inflation for November
1.30pm GMT: Canadian GDP for Q3 20201.30pm GMT: Canadian GDP for Q3 2020
2.45pm GMT: US manufacturing PMI for November2.45pm GMT: US manufacturing PMI for November