Arcadia Group, the British retail empire owned by Philip Green, went into administration
Because of the pandemic? Kinda. Arcadia blames its demise on the era of social distancing. But the retail industry has been crumbling under the pressure of digital disruption for ages.
It’s been over 25 years since Amazon strutted onto the scene with plucky plans to digitize shopping. Since then, retailers have ignored the way e-commerce has remolded the industry. Brick and mortar stores, they thought, would never go out of fashion.
Then, they did. The thinning herd goes beyond Arcadia: Brooks Brothers, Victoria Secret and Macy’s have all taken a hit this year. And speedy new online retailers, like Misguided and Boohoo, are reaping the benefits.
Blame it on Phillip… is the approach most outlets are taking. He’s an easy target. MP’s hate him. He famously sold a homeware chain for £1 (it collapsed immediately). He took £1bn out of Arcadia in dividends. He lives on a massive yacht in the tax-haven of Monaco.
But, Phil’s approach to retail is pretty commonplace. Example: Debenhams was famously controlled by a string of private equity firms in the 2000s who took similar amounts out of the business in dividends.
A Darwinian shakeup. Tempting as it is to blame Phillip Green for all the world’s evils (so, so tempting), pinning Arcadia’s downfall solely on him, or the pandemic, is short-sighted.
Retail is a different beast to the one it was a decade ago, and old-timers left it too long to re-evaluate their approach to an increasingly digitized sector. Instead, they chose to chase a quick buck.