Sir Philip Green’s Arcadia group has been given taxpayer backing through the government’s job retention scheme to furlough 14,500 workers.
The news comes just days after Sky News revealed that the group was halting payments to its pension scheme to help it get through the coronavirus crisis.
Arcadia said in a statement: “Safeguarding jobs through this period is critical and we are grateful for the government support offered by the job retention scheme which will enable us to ‘furlough’ a substantial number of our colleagues who are unable to work.
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“All store employees have been furloughed effective from 21 March and the majority of our head office employees will be furloughed from 5 April.”
The government’s job retention scheme covers 80% of an employee’s wage, to a maximum of £2,500 per month, at no risk or expense to the employer.
Group chief executive Ian Grabiner said: “The actions we have taken are essential in order that we can manage our business through these unprecedented times.
“We are grateful for the support and understanding of our staff and all of our stakeholders during this incredibly challenging time.”
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The board and senior leadership team are to reduce their salaries by 25-50% and Mr Grabiner has chosen to receive no salary or benefits until further notice, Arcadia said.
Arcadia, which has made billions of pounds for Sir Philip and his family, was already struggling before the coronavirus outbreak forced all non-essential shops to close.
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Sky News revealed last month that the company – which is behind high street brands including Burton, Dorothy Perkins and Topshop – was suspending rent payments to landlords, joining the likes of Burger King, New Look and Body Shop.
In June last year, Sir Philip had narrowly secured creditor’s support for a rescue with a controversial CVA (company voluntary arrangement).
As well as the £175m cash contributions into Arcadia’s pension scheme it was also granted security over a further £210m of property and other assets.
In return, Arcadia signalled its intention to close dozens of stores and reduce rents at hundreds more.
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As part of the reorganisation of his companies, Sir Philip, who was also criticised after the 2016 collapse of BHS, paid $1 to buy back his private equity partner’s 25% stake in Topshop and Topman.
The rescue deal also required to company to pay £25m annually into its pension scheme for the next three years – monthly payments of just over £2m.
Those contributions are now said to have been postponed for at least three months – and possibly longer, depending upon the length of the COVID-19 shutdown.
SOURCE : https://news.sky.com/story/coronavirus-sir-philip-green-to-use-taxpayer-money-to-pay-staff-during-shutdown-11967850