Arcadia falls into administration putting 13,000 jobs at risk – business live

Graeme Wearden

from on 2020-11-30 22:34 (#5B0XJ)

Rolling coverage of the latest economic and financial news, as Sir Philip Green's Arcadia group enters administration

Breaking: Deloitte appointed as administrators to Arcadia
No job losses today, but 13,000 at risk
Full story: Green's career ends in failure
Nils Pratley: Green must cover Arcadia's pensions deficit
Mike Ashley's 50m emergency loan is rebuffed

10.34pm GMT

Here's retail analyst Paul Mitchell on Arcadia's collapse tonight:

A total of 9,294 employees were on furlough at the time of the joint administrators' appointment.

The collapse of Arcadia is the largest retail business failure during the pandemic and will blow a particularly cold wind across the high street ahead of the crucial Christmas period.

10.19pm GMT

The UK's tax authorities could miss out on substantial revenue because Arcadia collapsed tonight rather than surviving until tomorrow, points out Oliver Shah, business editor at The Sunday Times.

Arcadia goes into admin hours before the Crown Preference would have secured tens of millions of pounds of debt for taxpayers... pic.twitter.com/Vr75sL71Vj

10.11pm GMT

Sir Philip Green's Arcadia Group has collapsed into administration, putting 13,000 jobs at risk as the retail tycoon's high street career ends in failure, my colleagues Joanna Partridge and Sarah Butler write.

The owner of household names including Topshop, Topman, Miss Selfridge, Dorothy Perkins, Evans and Burton appointed administrators from Deloitte on Monday.

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."

10.10pm GMT

Our financial editor, Nils Pratley, makes a strong case for the Green family to do the right thing, and cover the shortfall in Arcadia's pension scheme:

The main reason why a deficit in the pension fund has persisted over years is that the Greens extracted their famous 1.2bn dividend from Arcadia in 2005. The payment weakened the company's balance sheet and undermined its ability to make catch-up pension contributions in leaner trading years.

The good news, possibly, is that the gap may turn out to be smaller than the publicised 350m. The fund also has some claims on Arcadia's properties and administrators may be able to raise a few quid for unsecured creditors. The financial arithmetic may not become clear for many months.

10.05pm GMT

Here's our timeline of Philip Green's career, from early days running a Mayfair discount store to the collapse of his retail empire tonight:

9.54pm GMT

Arcadia's collapse into administration is an ignominious end to Sir Philip Green's long career as a retail tycoon, points out Reuters tonight.

He was knighted by the Queen, feted by Prime Ministers Tony Blair and David Cameron, and rubbed shoulders with A-listers like supermodel Kate Moss and actor Sylvester Stallone.

Based in Monaco, home of the super-rich, he was oft snapped by paparazzi on his 100-million-pound superyacht, Lionheart, and even hired Beyonce to perform at his son's bar mitzvah bash.

Lawmakers branded him the unacceptable face of capitalism", saying his greed and disregard for corporate governance led to the company's demise.

They called for him to be stripped of his knighthood, while newspapers vilified and lampooned him as a fat-cat tycoon.

The fall of the king: Philip Green's Arcadia adventure ends in ignominy https://t.co/hMfGOtnTN3 pic.twitter.com/DjoP1FnY4n

9.26pm GMT

West Midland Mayor Andy Street (who used to run John Lewis), reminds us that Arcadia was once a retail superpower'.

Street is also concerned about the future for Arcadia's pension scheme, which has a deficit estimated at 350m.

Deeply sorry to see this happen to what was a retail superpower. Hoping that as many shops and jobs as possible are saved and the pensions of loyal staff protected after Arcadia enters administration.https://t.co/mnMDVN1f5E

9.14pm GMT

Arcadia's future had been uncertain for a couple of weeks, since Sky News reported that it was looking to borrow 30m to prop up the business.

Professor John Colley, Associate Dean of Warwick Business School, argues that Sir Philip Green could have provided more funding himself, rather than letting the group fall into administration.

If reports are to believed, Arcadia has gone into administration for the want of 30m. Sir Philip Green clearly does not feel it is worth funding that from his 1.7 billion fortune to save his reputation.

Perhaps the various accusations of bullying and sexual harassment [which Green denies], dumping pension fund liabilities by selling BHS for a 1, and the recent creditors voluntary arrangement (CVA) has brought him to this point. CVAs rarely work for long and this looks to be no exception. They are usually just a stage on the path to administration.

9.03pm GMT

Arcadia's slump into administration tonight could be the end of an era for the high street, and a heavy blow to its 13,000 workforce at the end of a very rough year.

Paul McNamara of Channel 4 News points out that hundreds of shops, and some well-known brands, are at risk:

#BREAKING

Arcadia group has gone into administration.

13,000 jobs, 500 shops and 8 brands now at risk of disappearing pic.twitter.com/8DlqQTkXKm

Arcadia, Sir Philip Green's retail empire, is now in administration. Restructuring partners at Deloitte have been appointed as part of a trading administration. This means the shops of the group's 8 brands should reopen in England when lockdown lifts on Wednesday

Now it's official. Arcadia has gone into administration. Thinking of the 13,000 not sure whether they'll have a job after all this & future generations who will never know the joy of a Saturday spent simply mooching around Topshop with friends https://t.co/tQju3IGtwe

Thinking of all the Arcadia employees. This is a sad day.

8.49pm GMT

Arcadia's collapse into administration could be bad news for fellow struggling retailer Debenhams.

JD Sports had been lining up a rescue bid for Debenhams -- but, they're well aware that Arcadia is Debenhams' biggest concession holder, and an important source of sales.

While the Covid crisis has undoubtedly accelerated the company's decline, in reality, the writing had been on the wall for Arcadia for some time after its competitors forged ahead with high profile online propositions that it simply failed to match.

All eyes will now be on the possible impact of the news on JD Sports' proposed rescue deal for Debenhams, which surely now hangs firmly in the balance given how prominently Arcadia brands feature in its stores."

8.40pm GMT

Simon Underwood, business recovery partner at accountancy firm, Menzies LLP, agrees that Arcadia's reliance on physical stores was its undoing.

He predicts that the group will be broken up, with some brands snaffled by online rivals.

Today has seen the fall of one of the giants of the UK retail landscape and Sir Philip Green, the so-called King of the High Street'.

While the Group's fate may have been sealed by pandemic-related financial pressures, its reliance on physical stores has long been its Achilles' heel. This has prevented it from taking advantage of the e-commerce boom experienced over the last few months, in contrast to online-only competitors such as Boohoo and PrettyLittleThing.

8.34pm GMT

Ian Grabiner, CEO of Arcadia, also blames the pandemic for Arcadia's fall into administration tonight:

Grabiner says:

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.

8.22pm GMT

Deloitte's Matt Smith adds that the administrators hope to find one or more buyers" for the group's businesses (which include Topshop, Topman, Miss Selfridge, Burton, Dorothy Perkins, Evans and Wallis).

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.

We will be rapidly seeking expressions of interest and expect to identify one or more buyers to ensure the future success of the businesses. As Administrators we'd like to thank all of the Group's employees, customers and business partners for their support, at what we appreciate is a difficult time."

8.20pm GMT

Matt Smith, Joint Administrator at Deloitte, says that the Covid-19 lockdowns has created a critical funding requirement" at Arcadia -- adding to the existing challenges facing the high street.

Arcadia sits at the heart of the High Street, and has been striving to combat the impact of COVID-19 throughout this year. Now the effect of the lockdowns, combined with broader challenges facing bricks and mortar retailers, have resulted in a critical funding requirement for the Group and today's administration.

8.13pm GMT

NEWSFLASH: Sir Philip Green's Arcadia retail empire has fallen into administration.

Deloitte has just been appointed as administrators to the company. It says that no redundancies are being announced today, and that Arcadia's stores will continue to trade.

Philip Green's Arcadia group has appointed administrators putting 13,000 jobs at risk. No immediate redundancies and stores will continue to trade

Matt Smith at Deloitte, says of Arcadia: The effect of the lockdowns, combined with broader challenges facing bricks and mortar retailers, have resulted in a critical funding requirement for the Group and today's administration." Says intention to continue to trade all brands.

8.03pm GMT

Jack Dromey MP, Labour's shadow pensions minister, has tweeted that Philip Green has a moral duty' to protect Arcadia's pensioners.

Philip Green's Arcadia empire faces collapse as 13,000 staff face losing their job - he is a fabulously wealthy man. The victims of his mismanagement face a bleak future. There is at least a moral duty on him to protect their pensions @DailyMailUK https://t.co/ZkrUOP8LhY

7.12pm GMT

The futures of around 13,000 Arcadia staff are still hanging in the balance tonight, after the company turned down Mike Ashley's 50m emergency loan offer today.

The broader picture in retail is bleak too, with a new report showing that more than 158,000 jobs in UK retail have been lost so far this year.

Data from the Centre for Retail Research (CRR) compiled for the Evening Standard, calculates 158,064 UK retail jobs were lost between January and November 29.

These figures do not include Arcadia which continues to trade.

Really tough out there: The Centre for Retail Research calculates 158,064 UK retail jobs were lost between January and November 29. https://t.co/iBuBoGrFPd

6.53pm GMT

Dr Jonathan Reynolds, associate professor in retail marketing at Oxford Said Business School, says Philip Green's increasingly tarnished' reputation has held Arcadia back, and deterred top managers from working with him.

Arcadia failed to compete on either price or experience. And whilst the increasingly tarnished reputation of Sir Philip might not have been immediately associated by consumers with the Arcadia brands, it almost certainly affected the group's ability to attract and retain senior talent.

Ultimately, retailing has always been about change and it seems that Arcadia Group will be the next casualty of this relentless and unforgiving process."

There's no question he was a bully, everyone knows he was a bully,"

In 2003 Green described the Guardian's then financial editor Paul Murphy - born in Oldham and raised in Portsmouth - as a fucking Irishman" who can't read English". In the short conversation with the Guardian, which the newspaper printed in full, he said the words fuck" or fucking" 14 times.

Challenged later about his bad language, Green said: Do I say fuck off? Yes, if people don't behave themselves," according to a profile in Tatler.

6.32pm GMT

The best hope for Arcadia's brands to survive is to break the company up, says Chloe Collins, senior retail analyst at GlobalData.

But some brands, such as Topshop, will be in greater demand than others -- and if an e-commerce player such as boohoo buys it, then the stores would probably still close.

Topshop and Topman will undoubtedly attract the most interest from potential buyers. Although their reputation as fashion leaders has dwindled since their heyday, as they have lost market share to more agile young fashion retailers such as boohoo and ASOS, they still have potential and would be missed by those who have grown up with the brands. The boohoo group is likely to be keen to snap them up - Topman would really boost its menswear offer, which has always lagged behind boohoo's women's brands, and Topshop could benefit massively from boohoo's social media prowess and influencer relationships. However, any deal involving boohoo would most likely result in the closure of all stores, and these brands would be sorely missed from high streets. Miss Selfridge could be a good fit for boohoo though, however it would need to be revived with a niche selling point to differentiate it from boohoo's other brands.

Next and M&S have reportedly shown interest in bidding for some of Arcadia's brands, particularly Dorothy Perkins and Burton which would have the most appeal among their target demographics. However, Burton's ranges which mainly focus on formalwear have been largely redundant throughout the pandemic as consumers work from home and social events have been cancelled. Wallis and Evans may find themselves without a buyer as these brands are the most tired and uninspiring. Wallis lacks a unique selling point and also suffers from a focus on workwear, whereas Evans has lost significant as a plus-size specialist as more fashion brands have expanded their ranges to cater to these shoppers."

5.42pm GMT

Ros Altmann, the former pensions minister, has bad news for Arcadia pension scheme members.

She doesn't believe that the situation is comparable to the BHS pensions scheme - where Philip Green eventually agreed to pay 363m to cover its deficit, having sold the group for 1.

This situation is different from the furore which surrounded the insolvency of BHS.

In that situation, the Pensions Regulator had concerns about the lack of funding for the BHS pension scheme over many years and the fact that the business had been offloaded without plans in place to fix the deficit of over half a billion pounds.

The sad reality is that Arcadia's pension scheme is more likely to enter the PPF, reduces most members' pensions by between 10% and 20%, which will be an added blow to the thousands of workers who may also lose their jobs.

My comments on the Arcadia pension scheme situation. I don't think this is comparable with BHS and it is likely to just go into the PPF. https://t.co/u4yenHCRL3

Measured comment from @rosaltmann on the Arcadia pension situation: "not a re-run of BHS"

PPF/regulator signed off a deficit reduction plan last year as part of the CVA

Fact that Green extracted a gigantic dividend 15 years ago does not change the legal position

5.25pm GMT

Despite a late wobble, Britain's stock market has racked up its best monthly gains in over three decades.

The FTSE 100 has surged by nearly 12.4% during November, lifted by the encouraging vaccine trial news from Pfizer, Moderna and AstraZeneca earlier this month, and relief that the US election is behind us.

On the month...

Stoxx 600 +13.7%, best month ever
FTSE 100 +12.4%, best month in more than 31 yrs
DAX +15%, best month since Apr 09
CAC +20%, best month in more than 32 yrs
IBEX +25.2%, best month ever

#FTSE 100 ended down 69.27 points, or 1.1%, at 6,298.31 despite positive vaccine news from @moderna_tx as November's stellar rally peters out #stocks #finance #trader #vaccine #forex #economy #forextrading #business #news https://t.co/TGmgNmsYGq

4.30pm GMT

ITV News's Joel Hills has tweeted Arcadia's letter to Frasers, rejecting Mike Ashley's offer to lend them 50m.

There's only one way it's going now" - Acadia set for administration in the coming hours after the Chairman formally (and unsurprisingly) rejects Mike Ashley's loan offer. Andrew Coppell says board gave it due consideration" but we shall not be progressing it". pic.twitter.com/ESRM4Ifbhs

4.29pm GMT

Here is the full letter which Work and Pensions Committee chair Stephen Timms sent to the Pensions Regulator's CEO, Charles Counsell today, urging him to protect Arcadia's pension scheme members.

Dear Charles,

4.05pm GMT

Dr Gordon Fletcher, of the University of Salford Business School, says that Arcadia - and its staff - are paying the price for Philip Green's reluctance to invest in its brands amid the move to online shopping.

Arcadia is personalised around its chairman, Philip Green. This is a textbook case study into the impact that different styles of leadership and management can have on a business. Arcadia's brands have been slow to diversify into other countries or to make an exciting online offering - although Topshop's 80% discounting on Cyber Monday is a headline in its own right - and have not kept pace with the contemporary fashion offerings of the online-only competitors.

As a private company the focus appears to have been on the short term by reaping of dividends during profitable periods with no investment back into the brands themselves. Consumers do increasingly expect conversations and interaction with the brands that they want. If that investment has not been made to let that conversation happen then loyal consumers will look elsewhere. Arcadia and its brands are now paying the price for this lack of focus on the consumer and its ability to keep pace with the changing expectations of retail."

3.46pm GMT

Getting back to Arcadia, and the Money Advice Service have tweeted some information for customers.

This includes:

More information for customers of the #Arcadia group: pic.twitter.com/1T5r6S9JKk

3.39pm GMT

In other non-Arcadia news, president-elect Joe Biden has officially nominated former Federal Reserve chair Janet Yellen as the next US Treasury Secretary.

Economists have predicted that Yellen will work closely with the Fed to push through more stimulus measures to support the US economy, which could have a positive knock-on impact on other economies.

We face great challenges as a country right now. To recover, we must restore the American dream-a society where each person can rise to their potential and dream even bigger for their children.

As Treasury Secretary, I will work every day towards rebuilding that dream for all.

3.29pm GMT

Back in the markets, cryptocurrency bitcoin has just surged to a new alltime high.

After slumping late last week, bitcoin's rocketed by around 16% today to a new high over $19,800 (up from around $17k on Friday night).

#Bitcoin just hit an all-time high! Onward and upward we go to the moon! pic.twitter.com/CfyuBAelZZ

3.07pm GMT

Mike Ashley's Frasers Group have just confirmed that Arcadia has rejected its offer of a 50m emergency loan.

In a brief statement to the City, Frasers says the proposal of a lifetime loan' was declined without any engagement:

Frasers Group can confirm that Arcadia Group Limited have declined Frasers Group's offer of a lifeline loan of up to 50m.

Frasers Group were not given any reasons for the rejection, nor did Frasers Group have any engagement from Arcadia before the loan was declined.

2.58pm GMT

The Work and Pensions Committee has now written to the Pensions Regulator, calling for it to support Arcadia's workers (as flagged by chair Stephen Timms MP earlier).

The committee is urging the regulator to do everything in its power to fight for members of the pension scheme, given its estimated 350m deficit.

BREAKING: The Work and Pensions select committee has published its letter to The Pensions Regulator which contains questions relating to the troubled Arcadia group #pension schemes.

More to follow. pic.twitter.com/68kuPBAT1f

In the letter to Charles Counsell, chief executive of The Pensions Reuglator, the Work and Pensions select committee says that during a global pandemic, and with so many Arcadia staff facing job losses, "the interests of pension scheme members should be front and centre."

MF

In the letter, Stephen Timms, Work&Pensions committee chair, asks when Lady Green will meet a guarantee to pay 100m to the #pension schemes.

In a July letter to the Cttee, Mr Counsell stated the
100m was "guaranteed to be paid regardless of what happens" to the Arcadia group.

Mr Timms also asks whether a security package for the schemes, agreed as part of a 2019 rescue deal for Arcadia, would be triggered. The package included assets secured for the schemes valuing 210m.

Mr Timms asks when these assets will be
transferred to the schemes.

Mr Timms also asks The Pensions Regulator if the deficit reduction contributions of the Arcadia Group schemes were affected by funding easements introduced for DB schemes during Covid-19 pandemic.

We know that Arcadia did take advantage of these easements & had a payment holiday

Mr Timms also asks The Pensions Regulator what lessons it "will be applying" from its experience with the BHS schemes in 2016.

The Regulator was forced to chase Sir Philip Green for not funding the BHS schemes properly, when BHS collapsed in 2015.

Finally, MPs want to know what the Regulator is doing to protect Arcadia #pension scheme members fromthe threat of investment scammers, given the uncertainty over the future of their benefits.

2.38pm GMT

Although Arcadia hasn't fallen into administration yet, the newspapers are already drawing lessons from its demise.

The Guardian calls it a cautionary tale', which shows that the government must do more to support UK retail and to rein in its excesses.

Financial engineering saw a 1.2bn tax-free dividend paid to the Green family in 2005. But there was little innovation. Arcadia lost ground to high street and online rivals. Sir Philip became embroiled in unseemly rows with the pensions watchdog over Arcadia's retirement fund and his behaviour towards employees. More than 13,000 jobs could go in the biggest retail collapse of the pandemic so far....

Coronavirus is a reckoning for the retail trade, with profound effects for the economy. As big names go under, landlords face rent shortfalls that could drag down asset prices. Creditors will be staring at big losses. This unsustainable mix of trends is coming to a head: job cuts lead to income reductions and then spending drops. Workers cannot load up with ever increasing levels of debt. Demand for goods and services will fall. The government must show leadership by setting a policy framework that is conducive to good jobs, with effective tech oversight and proper corporate accountability. It might be too late to stop the Green family sloping off in a yacht, but checking irresponsible behaviour in business ought to be part of the ministerial brief.

In his early days, his bold moves were rewarded with rapid and often spectacular returns. The break-up of Sears, which he took over in 1999, resulted in a profit of almost 300m, while the refinancing of Arcadia in 2005 resulted in a 1.2bn tax-free dividend to the Green family.

Sir Philip's retailing ability is more hotly debated. This idea that he had a Midas touch is nonsense," said one person who has worked with him. He is not strategic at all, there is no long-term plan."

The rise and fall of Philip Green's Arcadia retail empire https://t.co/fF1Xc2A4uR

In a strange twist, the future of Green's empire and Debenhams, another fallen high street star, are bound together. As the biggest provider of fashion concessions in Debenhams stores, if Arcadia goes under then it could take its rival with it, at the cost of another 12,000 jobs.

It's hard to see how Green gets to keep his knighthood after this. But, if he does, perhaps it should be for services to the insolvency profession.

In 2015 Green sold BHS (previously part of the Arcadia empire) to Dominic Chappel for 1. Just 11 months later the company collapsed, and Chappel was sentenced to six years in prison for tax evasion while running BHS. The closure cost 11,000 people their jobs and, perhaps more controversially, the company left a pension deficit of around 571 million.

This, combined with the fact Green has featured heavily in the media in recent years over allegations (which he denies) of sexual harassment, has meant Topshop's owner is bad for brand Topshop, particularly among its Gen Z consumers, who generally tend to be more mindful, moral shoppers who carefully consider where (and with whom) they spend their money.

1.54pm GMT

Labour MP Stephen Timms is calling on Sir Philip and Lady Tina Green to meet their moral obligation to Arcadia's pensioners, by plugging the pensions deficit.

Timms, who chairs parliament's Work and Pensions Committee, says he's writing to the pensions regulator to underline the importance of securing the interests of pension scheme members, should Arcadia collapse.

There are legal obligations. But there's also a very strong moral obligation, and I'm hoping very much that the Green family will honour that.

Guardian front page, Wednesday 1 March 2017: Green stumps up 363m for BHS pensions pic.twitter.com/h0Wes6bLcp

Sir Philip Green just decided it's time to repair his battered reputation with a 363m pensions payouthttps://t.co/ey2m7Ppapt pic.twitter.com/zN7ltS0HvY

1.37pm GMT

Pensions expert John Ralfe has outlined the situation regarding Arcadia's pensions scheme on Sky News.

Last year Lady Green agreed to put in 100m over two years, as part of a deal with the pension's regulator. Ralfe thinks 50m has already gone in, with the other 50m still owed even if the company is in administration, he says.

Once you've taken into account the fall in retail property values over the last couple of years, very significant for all the reasons that we know, and then you take off the first mortgage, I doubt very much whether there's anything for the pension scheme.

https://t.co/8P3TSwYYpa My interview on Arcadia with @IanKingSky on @SkyNews

12.45pm GMT

Much of the Green family fortune can be traced back to 2005, when the Arcadia owner effectively awarded himself a 1.2bn pay cheque - the biggest in UK corporate history.

Three years after buying Arcadia, Philip Green decided to pay out a 1.3bn dividend. Some 1.17bn of the money went to his wife Tina, who owns 92% of the company - and as she lived in Monaco, it wasn't taxed in the UK.

The cash will be coming from a seven and a half year loan to Arcadia. It is senior debt, not rinky-dinky funny money. It is plain vanilla, not chocolate or raspberry," said the tycoon, who also owns Bhs.

It is affordable and it is not over-aggressive. It leaves the business with plenty of opportunities to grow

Green and his family own 92 per cent of Arcadia, with the remaining 8 per cent owned by HBOS, the bank. The bumper payout is all the more staggering given that at the time of the 2002 deal only 10m of pure equity was invested in Arcadia - 9.2m from Green and 800,000 from HBOS.

Green's 1.2bn dividend represents a return on his initial investment of 130 times. We have made 130 times our money and we are still playing," he says gleefully.

12.09pm GMT

Shares in some of Arcadia's rivals are rising this morning, as the City anticipates the group's collapse and break-up.

High street rival Next has gained 2.8%, amid forecasts of less competition on the high street, while JD Sports are still up 6.5% on predictions that it might now drop its pursuit of Debenhams.

Arcadia is a bit like an old car - there are lots of assets under the bonnet that are very good and work quite well," said Richard Hyman, a retail industry analyst. With the right leadership and the right ownership you could squeeze a bit more out of it."

Hyman said there would be no shortage of suitors" for TopShop and said other Arcadia brands would be ripe for someone like Boohoo".

11.47am GMT

If Arcadia does collapse into administration, then the timing will be crucial for its creditors - including the UK tax authorities.

Fixed-charge creditors, or the highest-ranked and who include Sir Philip's wife Tina, are unaffected by the crown preference change. They will continue to rank at the top of the list for repayment irrespective of the timing of any administration - although that does not guarantee they will recoup all of their loans.

As part of the company voluntary arrangement agreed with creditors last year Lady Green - the ultimate legal owner of Arcadia - loaned the group 50m, secured on one of the group's distribution warehouses, and provided 40m to compensate landlords and 10m of additional equity.

11.01am GMT

Here's the Press Association's latest update on the Arcadia situation:

Plans for an emergency multimillion-pound loan to Sir Philip Green's struggling Arcadia Group have reportedly fallen through.

Sir Philip's retail empire, which includes the Topshop, Dorothy Perkins and Burton brands, has been revealed to be on the brink of collapse with around 15,000 jobs at risk.

10.42am GMT

But.. while consumer borrowing shrinks at a record pace, the UK housing market remains red hot.

The Bank of England reports that mortgage approvals hit a 13-year high last month. Lenders signed off 97,500 new mortgages in October, making it the busiest month since September 2007 (just before the credit crunch....)

10.31am GMT

New figures from the Bank of England show that households have cut back on consumer credit at the fastest pace since at least 1994.

The Bank reports that net consumer lending fell by 590m in October, taking the annual rate to a survey-record low of -5.6%.

Since the beginning of March, households have repaid 15.6 billion of consumer credit. As a result, the annual growth rate fell further in October to -5.6%, a new series low since it began in 1994.

9.57am GMT

Here's our news story on Mike Ashley's offer of a 50m emergency loan to Arcadia (and his interest in any sale process should the business collapse).

Mike Ashley offers Philip Green 50m loan as he plans Arcadia bid https://t.co/dOcNBSOP7N

9.48am GMT

Mike Ashley's Frasers Group could try to buy some Arcadia brands if the company does collapse, explains Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown:

If Arcadia Group does go into administration, Frasers Group is expected to go picking over the carcass, potentially to give a new lease of life to brands like Top Shop or Miss Selfridge.

But Mike Ashley has already been on an expansion drive this year, buying into Hugo Boss and increasing the company's stake in Mulberry, so there is some concern about whether Frasers Group can afford to go on another shopping spree right now.

Given the accelerated shift to digital brought about by the pandemic, the survival of iconic brands like Top Shop is going to rely heavily on improving its e-commerce offering, to enable them to stand a chance in the highly competitive online fashion world.''

9.25am GMT

While Arcadia teeters, Sir Philip Green has been based aboard his super-yacht, Lionheart, docked in Monaco's harbour.

Over the weekend, the Daily Mail ran a photo of Green soaking up the sun on his 100 million superyacht under a fur-lined blanket" last week,

Seeking to avoid the coronavirus pandemic, Green has spent most of the past year permanently onboard the 300ft yacht, which features a helipad, pool, 15 crew cabins and room for 12 guests. It is the third yacht that Green has commissioned from Italian shipbuilder Benetti Yachts.

If Green pushes ahead with the trip to the Maldives, local people are likely to remember him from his previous visits. He picked the Indian Ocean archipelago as the location for his 55th birthday party, which lasted five days, and reportedly featured a troupe of topless dancers and performances by George Michael and Jennifer Lopez. It was said to have cost about 20m.

9.00am GMT

If Arcadia collapses, then hundreds of small businesses in its supply chain will suffer.

Invoice insurance business Nimbla estimates that Arcadia's suppliers could be left holding up to 250m of unpaid invoices (the calculation is based on prior public accounts and similar defaults in the past).

The much needed injection of cash into UK businesses via CBILS and BBILS has succeeded in staving off insolvency for many SMEs. However it has also created a wave of zombie" companies that have little realistic chance of survival.

Arcadia's collapse highlights the danger of a domino effect as defaults on trade credit trigger others to fail. We estimate as much as 250m of unsecured debts will be left behind to Arcadia's suppliers."

We are concerned that Arcadia is starting to look like the Carillion of retail."

8.44am GMT

In the City, shares in retailer JD Sports have jumped by over 6% in early trading.

JD Sports shareholders will be relieved that Peter Cowgill now has an excuse to back away from his dubious plan to buy Debenhams.

8.12am GMT

Arcadia was already in trouble before Covid-19 hit the retail sector. Back in 2019, it avoided collapse after creditors backed a rescue plan that involves the closure of 50 stores and 1,000 job losses.

Business consultant Kate Hardcastle told the BBC that there are three reasons the company is struggling:

"They lost relevance with their consumers"
Retail analyst @katehardcastle tells #BBCBreakfast the potential collapse of Arcadia is not solely because of Covid-19.https://t.co/bypreXOp4A pic.twitter.com/xMf7IwxV4s

7.48am GMT

My colleague Zoe Wood has analysed how Sir Philip Green's empire, which once dominated the high street, is now teetering on the edge of administration.

The 68-year-old businessman has been trying to extricate himself from Arcadia without loss of face for some time. The company only narrowly avoided administration last year when landlords backed a restructuring plan that involved closing 50 shops and shedding 1,000 jobs.

In the coming days Arcadia is expected to enter light-touch" trading administration, which means management retains control of the day-to-day running of the business while administrators seek buyers for all or parts of the company. Struggling department store chain Debenhams took this route in April, although a rescue deal is still to be finalised.

Green's abrasive style didn't win him many friends in the boardroom, but it has won grudging respect. He is one of the best dealmakers I've seen," recalled one senior retailer.

I don't think he is a particularly good retailer; he is good at buying and selling. He ended up being a victim of himself. When you want to screw everybody over all the time ... nobody wants to buy anything from you."

7.34am GMT

Some early news --Frasers Group, the retail group formally known as Sports Direct, has confirmed that it has offered Arcadia up to 50m of emergency funding.

Frasers, run by Mike Ashley, also says it would be interested in taking part in any sale process - should Arcadia fall into administration.

Frasers Group notes recent press reports concerning the potential provision of emergency funding by the Company to the Arcadia Group.

The Company can confirm that it has made an offer and provided draft terms to the Arcadia Group for a loan of up to 50 million and is now awaiting a substantive response.

Mike Ashley straight out of the gate with a 50m emergency loan from Frasers Group (#FRAS) to Arcadia. If a rescue deal fails, Frasers 'would be interested in participating in any sale process'.https://t.co/XFRckVqIVu

#Arcadia

Sport's Direct owners - Mike Ashley's Frasers Group - says it "would be interested in participating in any sale process"
if Arcadia enters administration.

More @bbc5live pic.twitter.com/K4LNF73rE6

Least surprising news of the day from Frasers Group:

"Should...Arcadia Group enter into administration, the company would be interested in participating in any sale process"

However, his offer has been angrily dismissed as a publicity stunt' by sources close to Sir Philip.

One said: Sir Philip is not keen to jump into bed with a chancer like Mike Ashley.'

7.24am GMT

MPs and unions have been urging Sir Philip Green to make good" the huge shortfall in Arcadia's pension scheme.

Otherwise, staff could suffer a 10% cut to their retirement income if the company collapses, and the scheme is placed into the UK's Pension Protection Fund.

Stephen Timms, the chair of parliament's work and pensions select committee, called on Green and his family to plug an estimated 350m funding shortfall. He said he would write to the Pensions Regulator on Monday to underline the importance of securing the interests of pension scheme members", adding: Whatever happens to the group, the Green family must make good the deficit in the Arcadia pension fund."

The former Labour MP Frank Field, who clashed with Green when his BHS department store chain went bust leaving a huge hole in its pension fund, said Green should honour previous promises that he would look after his family" of workers.

7.16am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Arcadia is on the brink of becoming the biggest corporate casualty of Britain's Covid-19 crisis. Sir Philip Green's retail group is expected to filed for administration as soon as today, having failed to agree a rescue deal to keep the company afloat.

This is obviously a sad day, we tried to save it a year ago when 200m was put into the business and the pension fund, but it's impossible to operate now.

You don't know when you'll be open, you don't know what stock to buy."

(global equities) MSCI all-country Index is on track for the biggest monthly gain since 1990 inception, chart @BloombergTV https://t.co/hUImQCXNSm pic.twitter.com/t3q0FnVXDL

European Opening Calls:#FTSE 6330 -0.60%#DAX 13251 -0.64%#CAC 5567 -0.56%#AEX 608 -0.62%#MIB 22230 -0.55%#IBEX 8144 -0.57%#OMX 1921 -0.84%#STOXX 3502 -0.73%#IGOpeningCall

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