British high-street fashion retailer Topshop chaired a ‘significant’ meeting with its top directors to decide the future of the clothing chain, which has been struggling since the beginning of 2019.
The brand, owned as part of a fashion retail empire operated by disgraced businessman Sir Phillip Green, are meeting to choose the last option for the flailing company – whether they can afford to go into administration and work themselves out of their debt, or if they will sell Topshop and its subsidiaries to the highest bidder.
Working Under A CVA
Currently, Topshop is working under a Company Voluntary Arrangement (CVA), which presents two controversial options for the business.
Though directors are looking to keep the business running – both for their investors and for customers – both options put the company in a difficult position. If they choose to continue operating under the CVA – a decision disliked by employees – Topshop will flood the company with much-needed cash by closing and selling off a number of their stores around the United Kingdom.
Already, it’s been rumoured that 50 Dorothy Perkins shops, which operate under the same umbrella firm as Topshop, will close because of the company’s dire financial situation, leaving hundreds unemployed.
Alternatively, the company may decide to sell the business altogether to the highest bidder, which could put jobs and the presence of the brand on the high street at an even greater risk.
High Street Pressure
The meeting comes as the British high street reveals its struggles to compete with internet-based fashion retailers for purchases.
With Debenhams now planning to close multiple stores to solve its money woes, it would not be surprising to see Topshop try a similar feat to save the company overall.
Directors have stated that the potential for remaining within the CVA is slim, they will only agree to continue if 75% of Topshop’s creditors agree with them that the company can recoup its losses.
Topshop’s fall from grace is just another nail in the coffin of Sir Phillip Green’s career, which collapsed in 2018 when he was accused by multiple women of sexual harassment and bullying in the workplace.