The company said Thursday it has “significantly reduced” its head office employees and furloughed a “substantial” number of employees unable to work due to shop closures. Store employees were furloughed as of March 21, with the majority of head office employees set to be sent home April 3.
Arcadia said it plans to take advantage of the U.K. government’s offer to pay 80 percent of staff salaries if companies promise not to lay off workers.
Chief executive officer Ian Grabiner has elected to receive no salary or benefits until further notice. As reported, Arcadia is in the thick of a restructuring after teetering on the edge of bankruptcy last year.
The company said safeguarding jobs through this period is critical, “and we are grateful for the government support offered by the job retention scheme, which will enable us to furlough a substantial number of our colleagues who are unable to work.”
The board and senior leadership team will take a salary reduction of between 25 and 50 percent. Sir Philip Green, who transformed Topshop into of the biggest names on the British high street, does not take a salary or any drawings from the business, nor does he sit on its board, an Arcadia spokesman confirmed. Green is a director of Taveta Investments, which owns Arcadia.
“The actions we have taken are essential in order that we can manage our business through these unprecedented times,” said Grabiner. “We are grateful for the support and understanding of our staff and all of our stakeholders during this incredibly challenging time. We look forward to opening our store doors again as soon as it is safe to do so, and to welcoming back our colleagues and customers.”
The company said online operations are continuing, albeit at a reduced capacity and with the implementation of “strict” safety measures in ensuring the well-being of employees within distribution centers, and in accordance with the guidelines recommended by the government.
The group’s disgruntled creditors voted in favor of seven proposed CVAs, or company voluntary arrangements. Creditors’ approval meant that Arcadia could close stores, lay off workers, negotiate rent cuts and slash costs in a bid to return to profitability.
Had creditors, including pension trustees, suppliers and landlords, not given Arcadia the green light, the parent of brands such as Topshop, Topman, Miss Selfridge and Dorothy Perkins would have likely been forced to file for bankruptcy, putting 18,000 jobs at risk.