Thousands of jobs cut as last of once-mighty high street empire sold off

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By Scott Wright

THE grim tally of job losses in the UK’s beleaguered retail sector sparked by the pandemic mounted further yesterday after a deal was struck by boohoo to acquire the last of Arcadia’s fashion brands – but not their stores.

Around 2,450 people will their jobs yesterday after boohoo, the online clothing specialist, bought the digital, e-commerce, intellectual property and stock of the Dorothy Perkins, Wallis and Burton “heritage” brands from administrators of Sir Philip Green’s stricken Arcadia empire. The £25.2 million deal does not include Arcadia’s remaining 214 shops, which will now close.

The collapse of Arcadia has now led to the loss of nearly 5,000 jobs in the failed retailer’s store estate. Nearly 180,000 jobs have been lost in the sector since the pandemic took hold.

The boohoo deal comes shortly after ASOS picked up the Topshop, Topman, Miss Selfridge and HIIT brands for £265m last week. However, the deal struck by ASOS did not include any of the 70 stores operated by those four brands, which put an estimated 2,500 shop workers out of a job.

About 300 of Arcadia’s estimated 13,000 employees, mostly in design and product-related roles, have transferred to ASOS.

Under the boohoo deal for Dorothy Perkins, Wallis and Burton, around 260 jobs, mainly head office roles, will be saved as they move with the brands’ new owner. These include jobs in design, buying and merchandising, and the businesses’ digital wings.

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Some other staff will be kept on during a transition period, administrators at Deloitte said.

For boohoo, the deal for the Arcadia brands marks another coup in it its continuing expansion. In late January, the fashion retailer acquired the Debenhams brand and website for £55m. Again, the deal was for intellectual property and did not include the Debenhams chain of 118 department stores across the UK, which are expected to close with the loss of around 12,000 jobs.

John Lyttle, chief executive of boohoo, said: “We are delighted to announce the acquisition of the assets associated with the online businesses of the three established brands Burton, Dorothy Perkins and Wallis.

“Acquiring these well-known brands in British fashion out of administration ensures their heritage is sustained, while our investment aims to transform them into brands that are fit for the current market environment.

“We have a successful track record of integrating British heritage fashion brands onto our proven multi-brand platform, and we are looking forward to bringing these brands on board.”

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Professor John Colley, associate dean of Warwick Business School, said Boohoo and ASOS have taken advantage of the “turmoil” on the high street, which has seen shop closures imposed to suppress to coronavirus accelerate the online shopping trend and heap further pressure on bricks and mortar outlets.

“But the fact that these online retailers are only interested in the brands, not the stores themselves, is bad news for the high street,” he added.

“It means hundreds of shops will close and many thousands of staff will be made redundant. Those workers will probably have to change occupation as the high street continues to shrink, leaving little in the way for job opportunities.

“Meanwhile landlords will have to try to re-let the properties and there will be few takers in the current climate. With retail values collapsing, it is likely that many of these properties have to be converted for other uses. In that sense, we can see Covid-19 accelerating and crystallising trends which have been developing for many years.”

Arcadia ran 444 stores in the UK before it entered administration in December. Administrators have now sold all of its brands, raising around £500 million to pay off creditors. There is still some property in the portfolio left to sell.

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