UPDATE: June 14, 2019: Arcadia Group on Wednesday announced that its restructuring plan has "been approved by the required majority" of its creditors, including pension trustees, suppliers and landlords. Along with other pension deals, that allows the company to move forward with its turnaround, according to a company email to Retail Dive. But in a client note emailed to Retail Dive, GlobalData Senior Retail Analyst Chloe Collins said some landlords remain displeased, which is "unsurprising" because "Miss Selfridge and Dorothy Perkins are now irrelevant in a highly saturated market and chances of revival are slim." Topshop and Topman, which retain a strong millennial following, will be sold via e-retailer Asos, but "The £75m invested from [Arcadia Chairman Philip] Green into its physical stores ... is going to be too thinly spread as the agreed closures still leave Arcadia with an estate of around 500 stores which have been neglected for far too long and are now unable to match competition which moves in favour of experience-led shopping," Collins also said.

Dive Brief:

• Arcadia Group, which in the U.S. runs its Topshop and Topman brands and in the U.K. and Ireland also runs Dorothy Perkins and Miss Selfridge, among others, could shutter all 22 of its U.S. stores, according to multiple media reports and documents filed Wednesday with the United States Bankruptcy Court Southern District Of New York. 

• The London-based company will also close at least 23 stores at home, although it will likely be at least double that, according to a report from U.K. newspaper The Guardian. Arcadia Group didn't immediately respond to request for comment

• The conglomerate doesn't usually reveal financial details, but in documents sent to its landlords in recent days Arcadia said its total comp sales fell 9% in its last fiscal year, and that even after cutting 70 million pounds in expenses last year it can't afford its 170 million-pound annual rent bill, according to the Guardian's account. 

Dive Insight:

Apparel retail is tough on a good day, but adding financial improprieties and sexual harassment claims spells doom. The conglomerate's ability to withstand everyday retail challenges plus uncertainties introduced by the so-called "Brexit" plan for the U.K. to leave the European Union has been undermined by its billionaire chairman, Sir Philip Green, who has piled it with debt and whose personal behavior has lost it key partnerships.

That's the situation that Arcadia and its brands find themselves in, as the conglomerate's operations unravel. Some problems, like financial issues related to contributions to the company's pension fund and insufficient investment into its operations, go back years, while others are more recent. Last year, for example, after a member of Parliament surfaced allegations that Green had committed sexual harassment and other abuses, covering them up through non-disclosure agreements, Arcadia brands were dropped by partners that once served as a sign of their success. Beyonce, for example, severed the 2014 tie-up she had forged between her Ivy Park brand and Topshop.

The pension fund deficit threatens to endanger regulators' ability to approve the company's U.K. restructuring plans, according to a Thursday letter to Green from the chairman of the House of Commons Work and Pensions Committee. Those plans, known in the U.K. as a "company voluntary arrangement (CVA)" wouldn't be sufficient to save the company's brands in any case, according to data and analytics company GlobalData.

"The proposed closure of only 23 UK stores (4% of its current UK estate) and rent reductions at 194 stores, as part of its CVA, will not be enough to save Arcadia in a world where rising online sales continue to threaten the high street," GlobalData Senior Retail Analyst Chloe Collins said in comments emailed to Retail Dive. "The closures would leave a large portfolio of 543 stores remaining, and with only £50m to be invested as part of the proposal, any attempt to pay for an increase in store standards would be spread too thinly to make up for years of underinvestment."

A recovery seems distant. "For Arcadia to survive, Green must revamp its brands; ensuring they have a clear target audience, a point of difference from competitors, and enhanced digital platforms," Collins said.

But that's a tall order. Much of the portfolio has "lost relevance in today's retail landscape due to their uninspiring fashion ranges and weak multichannel offer," she also said. "Even Topshop, which used to be Arcadia's star player, has lost appeal among fashion shoppers thanks to tough competition from the likes of Zara, Primark and H&M, as well as online pureplays such as ASOS, PrettyLittleThing and boohoo.com."