Arcadia Group, a UK-based fast-fashion retailer, will close all 11 U.S. Topshop and Topman stores and will consider closing 23 locations in the UK, according to The Wall Street Journal. Additionally, the company filed for Chapter 15 bankruptcy in the U.S. and started undergoing a separate insolvency process overseas.
Arcadia Group will initially attempt to sell part or all of its U.S. stores as operating businesses, but will wind them down instead if it cannot find a buyer. Topshop and Topman stores will begin liquidating their inventory over Memorial Day weekend.
It is unclear how the bankruptcy proceedings will affect the company’s retail partners. As of May 24, Nordstrom was still selling Topshop women’s apparel on its web site.
Arcadia Group has been plagued by challenges in recent years, including an “increasing switch from in-store to online shopping and an aggressive discounting environment as retailers compete for customers” and “high levels of product returns,” Arcadia foreign representatives told The Wall Street Journal. The UK business also has been hit by an increase in the national living wage and a decrease in the value of the pound.
In the UK, Arcadia is seeking reduced rent at another 194 stores. Earning this relief will be part of the retailer’s restructuring plans, which also includes a focus on driving digital growth, increasing business-to-business revenue, improving infrastructure and exiting unprofitable stores.