The High Court has made formal orders winding up four companies employing 478 people here that are part of the UK fast fashion group Arcadia. The companies will continue to trade under the liquidators into the new year pending any disposal of the Arcadia group.
Mr Justice Brian O’Moore, when making the winding up orders on Monday and appointing joint liquidators, said this was “another sad milestone in the decline of bricks and mortar retailing in Ireland”.
The Irish operating companies, including Miss Selfridge Retail Ireland, between them employ 487 people in 14 stores in the Republic and 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. The Irish stores will continue to trade into January pending any disposal of the Arcadia group and to maximise the value of winter fashion stock.
The companies are Arcadia Group Multiples Ireland Ltd, Topshop/Topman Ireland Ltd, Wallis Retail Ireland and Miss Selfridge Retail Ireland.
The High Court had on November 30th last appointed Ken Fennell and James Anderson of Deloitte as joint provisional liquidators to the companies. Their appointment was sought within hours 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.
On Monday, John Lavelle BL, instructed by Artur Cox solicitors, sought various orders including for the appointment of Mr Fennell and Mr Anderson as joint liquidators and winding up the four companies.
Counsel outlined 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 the Irish companies are unable to pay their debts for reasons including the insolvency of the Arcadia group as a whole. They had already encountered difficulties prior to this year for reasons including the shift to online sales, high level of customer returns and increased competition and the Covid 19 pandemic had a catastrophic impact, Mr Lavelle said.
The Irish stores were closed for more than 23 weeks, seeing revenues plummet. Because online sales were carried out through UK entities, the Irish companies generated no income during the closures 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 of the insolvency process underway, the likelihood of realising those inter-group debts is limited, the court heard.
Declan Murphy BL, for the liquidators, said a sale of the Evans brand has been agreed in the UK administration but will not impact on the Irish companies operations.
During the November 30th hearing, the court was told the companies dispute the extent of a demand received from pension scheme trustees.
On Monday, a solicitor representing the trustees said, prior to the presentation of the winding up petition, the trustees sought a payment of some €2.5m. The trustees have made submissions to the liquidators concerning the ranking of their debt and about payments of sums falling due while the companies continue to trade, he said.
Dermot B. Cahill BL, for the Revenue, said there is an outstanding VAT debt of some €2.04m, plus more than €542,000 owed in PAYE, PRSI and USC. A sum of €81,913 was due in Corporation tax from the Wallis company and a refund may also be due to the group, counsel outlined.
Mr Justice O’Moore said he was satisfied to make the orders sought.