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People walk past the temporarily closed Topshop flagship store on Oxford Street, during England's second coronavirus lockdown, in London on Nov. 30, 2020.

Matt Dunham/The Associated Press

One of Britain’s largest retailers, Arcadia Group, has filed for bankruptcy protection, putting 15,000 jobs at risk and further damaging the country’s already rattled economy.

Arcadia owns around 2,500 outlets in Britain and 34 other countries, including Canada, which trade under several brand names such as Dorothy Perkins and Topshop. The London-based company failed to secure a £50-million ($86-million) emergency loan on Monday, leaving it with few options to avoid seeking protection from creditors. Most stores are expected to keep operating while Arcadia looks for a buyer.

“The impact of the COVID-19 pandemic including the forced closure of our stores for prolonged periods has severely impacted on trading across all of our brands,” Arcadia chief executive officer Ian Grabiner said in a statement late Monday. “In the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe.”

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Arcadia’s financial woes mark another setback for flamboyant retailer Sir Philip Green, 68, whose fashion empire has crumbled in recent years. It’s also a devastating blow to Britain’s retail sector, which has been pummelled by the COVID-19 pandemic.

Few European countries have been hit harder by the disease than Britain, and retailers have struggled to stay in business amid two national lockdowns and tight restrictions on social movements. Last week, the government said Britain was on track to record its worst recession in more than 300 years.

The Centre for Retail Research has estimated nearly 21,000 stores will close this year and 158,000 retail jobs have been lost in 2020, the most since the 2008 financial crisis.

The collapse of Arcadia could have far-reaching repercussions. Along with more than 500 stand-alone stores in Britain, the company also operates around 300 shops within Debenhams stores, which is facing potential liquidation. The 240-year-old Debenhams chain filed for bankruptcy protection in April and it has been negotiating a possible sale to rival JD Sports. That deal looks in doubt given Arcadia’s financial plight. If the deal folds, Debenhams’ 124 stores and 12,000 employees will be at risk.

Arcadia’s filing could also affect the efforts of the Canada Pension Plan Investment Board to recover a £250-million loan it made in 2017 to British shopping mall giant Intu Properties PLC. Intu filed for bankruptcy protection in June and the CPPIB’s loan is secured against the company’s Trafford Centre in Manchester, one of the largest shopping malls in Britain. The pension fund has been keen to see the mall sold so it can recoup the loan, but the sale process has been thrown into question. Arcadia has five stores in the Trafford Centre, which also has a Debenhams. A spokesman for CPPIB declined to comment on Monday.

For Sir Philip, Arcadia’s troubles likely signal the end of his stunning 50-year career in the fashion world. Born in South London, Sir Philip quit school at 16 to work in his family’s business selling electronics and cars. He soon struck out on his own and began buying and selling fashion labels. His big break came in 1985 when he picked up a struggling blue jeans business called Jean Jeanie for about £65,000 and turned it around by slashing costs and sourcing directly from China. He sold the company a year later for £7-million.

That became a formula for Sir Philip, and by 2002 he’d spent more than £1-billion buying and transforming department store chain BHS Ltd. and Arcadia. Those deals catapulted Sir Philip into the upper echelon of British retail and he was knighted in 2006 by then-prime minister Tony Blair.

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As his empire grew, Sir Philip’s lifestyle became ever more outlandish. He relocated to Monaco for tax purposes and commuted to London in a private jet, holding court in the five-star Dorchester hotel or on his US$100-million yacht. His birthday parties became legendary for their extravagances and guest lists, which included Hollywood stars Gwyneth Paltrow and Leonardo DiCaprio. He’s also been serenaded in private performances by Tom Jones, Rod Stewart, Earth, Wind and Fire, and Stevie Wonder.

Shortly after buying Arcadia, he transferred control of the company to his wife, Tina, who is also based in Monaco. The transfer meant when Arcadia paid a £1.3-billion dividend in 2005, the Greens took most of the money and paid no tax in Britain.

But as his fame grew, his empire cracked. The cost-cutting and lack of investment took a toll especially in the face of aggressive online retailers such as Boohoo Group. He unloaded BHS in 2015 for £1 and the chain collapsed a year later, leaving 11,000 people out of work and a £571-million hole in the pension plan. The pension shortfall prompted a parliamentary investigation and calls for Sir Philip to be stripped of his knighthood. He apologized in 2017 and agreed to put £383-million into the pension plan.

Retail analyst Richard Hyman said Arcadia has been badly managed for years and the pandemic was the last straw. “This is like someone who’s got several terminal illnesses and then gets a bad cold and dies,” he said. “Eventually their deficiencies in retail terms, in branding terms, in relevance terms, has caught up with them.”

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