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U.K.-based Arcadia Group files for Chapter 15 bankruptcy in New York
By Sarah Lizee
Olympia, Wash., May 23 – Arcadia Group (USA) Ltd. filed for Chapter 15 bankruptcy on Wednesday in the U.S. Bankruptcy Court in the Southern District of New York to gain U.S. court recognition of its English law administration proceedings under the Insolvency Act of 1986.
According to the company’s petition, after trying to weather challenging market conditions primarily caused by the “increasing switch from in-store to online shopping and an aggressive discounting environment as retailers compete for customers,” the company’s directors resolved to enter administration in order to minimize losses to the creditors of the company.
“Without this court’s recognition of the U.K. proceeding, the company’s operations in the United States will likely cease, before the company has had an opportunity to monetize its inventory, due to the landlord and other creditor enforcement actions, which will have a devastating effect on the company, its administration and the group as a whole, ultimately resulting in diminished, if any, recoveries to the creditors of the company,” the petition said.
As part of the company’s business and recovery plan, Arcadia confirmed its intention to exit the U.S. retail operations and will explore options to sell all or part of those operations. Arcadia is seeking immediate inventory liquidation sales throughout the stores in the United States, conducted by Hilco Merchant Resources, LLC.
According to the petition, the balance sheet as of March 30 reflects that the company had total assets of £41.5 million and total liabilities of £139.6 million.
A hearing for the Chapter 15 petition and recognition is set for June 14.
Arcadia is a London-based fast-fashion retailer and operator of the Topshop and Topman brands. The case number is 19-11650.
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