Topshop Parent Furloughs Workers, Cuts Exec Pay as Coronavirus Batters the British High Streets
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Arcadia Group is the latest fashion company to take dramatic cost-cutting measures amidst the coronavirus pandemic.
The Topshop parent announced that it has furloughed all store employees effective March 21, with the “majority” of head office employees to be furloughed beginning April 5. Members of Arcadia Group’s board and senior leadership team are set to take pay cuts ranging from 25% to 50%. CEO Ian Grabiner will forfeit his salary and benefits until further notice.
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“The health and well-being of our employees, customers and communities remain paramount. The actions we have taken are essential in order that we can manage our business through these unprecedented times,” Grabiner said in a statement. “We are grateful for the support and understanding of our staff and all of our stakeholders during this incredibly challenging time.”
In 2019, Arcadia began the insolvency process in its home base of the United Kingdom and narrowly avoided going bankrupt, after receiving creditors’ approval to make cuts instead in the company’s quest for renewed profitability. As part of the restructuring process, all of Topshop’s 11 U.S. store locations were liquidated. Arcadia also shut 23 locations in the United Kingdom and Ireland, including those of its Dorothy Perkins, Miss Selfridge, Burton, Evans, Outfit and Wallis brands.
British shopping streets, which have already faced pressures amid shifting consumer preferences and the growth of e-commerce, are now faced with a nationwide lockdown; all brick-and-mortar fashion units were forced to shut as of March 24. One-fifth of the United Kingdom’s fashion spend could be wiped out amid the coronavirus pandemic, according to a March report from Global Data. The market research and analytics firm additionally predicts that apparel and footwear sales will drop by 11.1 billion pounds ($13.5 billion) in 2020 compared with 2019.
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