Fast-fashion lovers despair: Arcadia Group, the London-based retailer and operator of the Topshop and Topman brands, filed for Chapter 15 bankruptcy in the U.S. on Wednesday.
The company cited an “increasing switch from in-store to online shopping and an aggressive discounting environment as retailers compete for customers,” the Wall Street Journal reported.
Arcadia plans to restructure and concentrate on digital growth, adjust rents to sustainable levels, and abandon stores that aren’t profitable. Meanwhile, the company said none of its U.K. or Irish stores will close and employees will continue drawing checks as it seeks to improve lease terms for 194 lease sites and consider closing 23 stores long-term.
Arcadia Group operates 11 Topshop and Topman stores and has 800 employees in cities including New York, Chicago, Las Vegas, Atlanta, Houston and Los Angeles.
The bankruptcy is the latest in the brick and mortar fallout due to the high cost of leasing space and declining foot traffic in the wake of Amazon and other online retailers. The death toll includes Payless ShoeSource and Charlotte Russe this year already, and Sears last year.
Arcadia Group is wasting no time after the announcement. The company has already hired Hilco Merchant Resources to help liquidate its U.S. inventory and take advantage of the Memorial Day holiday weekend. [WSJ] — Georgia Kromrei