Following the closure of non-essential shops following the start of the second and most recent lockdown, which was on the 5th November, many retail industries are facing a possible collapse.
The biggest names that have been suffering come under Sir Philip Green’s retail empire- Arcadia. Topshop, Burton and Dorothy Perkins are all under threat, putting 13,000 jobs at risk if they, what seems to be inevitably, enter administration. This means that the business will be relatively protected from its creditors while it is put back on an even keel, or while parts or all of it are sold off.
Arcadia are expected to not have a last-minute rescue deal as they have already been seeking extra funds to make up for lost sales during the pandemic. This was in the form of a rejected £30 million loan from potential lenders after Arcadia had stated coronavirus had had “a material impact on trading” across their business.
Store closures are unavoidable, however some of Arcadia’s brands are likely to survive due to their online presence. Despite this presence, the online market is already saturated with colossal online-only retailers such as Asos, Boohoo and Pretty Little Thing- as competition.
Former City minister, Paul Myners, claims that “the game is up” for Arcadia whose brands have been “haemorrhaging now for 15 years” with Coronavirus being the most pivotal factor in their downfall. Topshop was once the “king” and “darling” of the High Street, yet Sir Philip has never accepted the opportunity or challenge of online trading, making no investment in that area at all- Myners continues.
The fall of Arcadia would then go on to damage other external retail giants, seeing as Debenhams is already in administration with Arcadia accounting for around £75 million of their sales. This would allow competitors to buy into the struggling companies with rescue deals- as JD Sports is currently looking to propose. Other companies that have been forced into administration are fashion chains Peacocks and Jaeger, after owner Edinburgh Woollen Mill Group failed to find a new buyer- a failing company’s largest struggle.
Outside of Arcadia, retail is being highly damaged, contributing to the 700,000 people driven into poverty because of coronavirus. Moss Bros launched a restructure of their business after stating that it has been “severely impacted” by Coronavirus.
Despite the negativity surrounding the High Street, there are plans in England to allow shops to open for longer in the run-up to Christmas and in January. Housing secretary Robert Jenrick claims that the relaxation of the rules would allow shopping to become “more pleasant and safer”.
This means that local authorities will be able to temporarily waive the rules restricting retail opening hours, giving shopkeepers and councils the power to decide how long stores stay open. Months of restrictions, as well as the recent lockdown, have evidently hit the High Street hard, meaning relaxation of opening hours should help to bolster business.
Jenrick has emphasised the importance of “social distancing” and how important it is in “controlling the virus” therefore allowing shops to open for longer times- putting “less pressure on public transport”. By doing so he is also urging local councils to offer retailers “the greatest possible flexibility” when determining trading hours as well as stock delivery times.
The dominance of online shopping has already put pressure on the High Street in the past, but now it is greater than ever.