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'Particularly severe' Provisional liquidators appointed to Irish companies in Arcadia group as company collapses

The judge was told the companies are unable to pay their debts for reasons including the insolvency of the Arcadia group as a whole.

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Topshop Dublin. Photo: INM

Topshop Dublin. Photo: INM

Topshop Dublin. Photo: INM

The High Court has appointed joint provisional liquidators to four Irish operating companies that are part of the UK high street fashion group Arcadia.

The companies, including Topshop/Topman Ireland, between them employ 487 people in 14 stores in the Republic and also have concession stands in various premises.

It is hoped to procure the sale of the Irish operations as part of an overall sale of the Arcadia group and the intent is the Irish stores will continue to trade under the provisional liquidators through Christmas to maximise the value of winter fashion stock, the court was told.

The application for the appointment came on Monday night, on the heels of the appointment of provisional administrators to the Arcadia Group (AGL) in the UK.

AGL owns the Topshop, Topman, Dorothy Perkins, Wallis Retail Ireland Ltd, Miss Selfridge, Evans, Burton and Outfit brands, trading from over 500 stores in the UK employing more than 13,000.

The court was told by John Lavelle BL, instructed by Artur Cox solicitors, the Irish companies rely entirely on AGL for them to trade and cannot operate independently of the Arcadia group as a whole.

UK entities own the relevant brands and intellectual property rights, operate the online platforms and own the leasehold interests in the premises used by the Irish companies, the court heard.

At a late night sitting, Mr Justice Michael Quinn granted the application to appoint Ken Fennell and James Anderson of Deloitte as joint provisional liquidators.

The companies are Arcadia Group Multiples Ireland Ltd, Topshop/Topman Ireland Ltd, Wallis Retail Ireland and Miss Selfridge Retail Ireland.

The judge was told the companies are unable to pay their debts for reasons including the insolvency of the Arcadia group as a whole.

The companies had encountered difficulties prior to this year for reasons including the shift to online sales and increased competition and those difficulties were compounded by the Covid-19 pandemic.

The impact on the Irish operations of Arcadia was “particularly severe” with the Irish stores, which were closed for 23 weeks, seeing revenues plummet by up to 60 per cent, counsel said.

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Because online sales were carried out through UK entities, the Irish companies did not generate any income from those sales and all four companies made losses in the financial year to end August 2020.

The main assets of the companies are sums due from other undertakings in the Arcadia group but, because there is an insolvency process underway, the likelihood of realising those inter-group debts is limited, counsel outlined.

The companies also dispute the extent of a demand received from pension scheme trustees, the court was told.

Mr Justice Quinn said he was satisfied to appoint the joint provisional liquidators and returned the petition to December 21st.

It was said the provisional liquidators appointment would facilitate the disposal of the Irish assets and potentially preserve employment, the judge noted.

A “particular feature” of this application is the hope a transaction in the UK will preserve the business and the jobs but, if that does not occur, the operation of the stores during the winter months would be a better option for employees and creditors, he said.

The appointment would facilitate the stores here reopening on Tuesday, he added.

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