Arcadia furloughs 14,500 staff, more firms will join it says analyst

By

Sandra Halliday

Published
Apr 2, 2020

The owner of the Topshop and Dorothy Perkins chains has furloughed the majority of its staff as, like the rest of the retail sector, it continues its fight for survival in the face of the coronavirus crisis.

Arcadia said on Thursday that 14,500 of its employees out of a total of 16,000 are being furloughed. Its store staff have been furloughed since March 21 and most head office staff will join them from April 5. The company's retail brands also include Topman, Miss Selfridge, Wallis, Evans and Burton.

Despite its stores closures, the firm continues to operate its webstores and it said it has increased its safety measures to keep the staff in these operations safe while they’re working. Some head office staff are also being retained to provide “essential functions”. 

The firm’s top team is also taking a pay cut ranging from 25% to 50% of their salaries while CEO Ian Grabiner said he’s taking no salary or benefits for now.

Grabiner said in a prepared statement: “The actions we have taken are essential in order that we can manage our business through these unprecedented times.”

The statement said that the company will take advantage of the government’s financial support via the job retention scheme that pays 80% of monthly salaries up to a maximum of £2,500. 

And analysts think this is a sign of things to come across the fashion retail sector.

GlobalData’s lead analyst Sofie Willmott said that “this does not bode well for other retail employees with many other clothing and footwear players now likely to follow suit. With clothing and footwear spend dropping off a cliff, despite many websites continuing to operate, retailers are cutting costs where they can to protect their long-term futures.

“Understandably there is no work for store staff while non-essential physical locations remain closed and head office employees will have little to do other than manage the cancellation of orders and attempt to drive online sales.”

She also thinks future range-planning “will be difficult without an end to the strain on discretionary spend in sight and retailers will not want to commit to future inventory when sales are not coming through. This is likely to significantly hit future product drops and retailers will now need to carefully phase their intake and newness to try and provide shoppers with a cohesive range, ready for when they want to buy again”.