Sir Philip Green’s retail empire Arcadia, which includes Topshop, Burton and Dorothy Perkins, is understood to be on the brink of collapse.
Sir Philip had been in talks with potential lenders about borrowing £30m to help the business through Christmas.
However, these talks have failed and administrators could be appointed on Monday, putting 13,000 jobs at risk.
Arcadia said the pandemic “has had a material impact on trading across our businesses”.
“As a result, the Arcadia boards have been working on a number of contingency options to secure the future of the group’s brands. The brands continue to trade and our stores will be opening again in England and the Republic of Ireland as soon as the government Covid-19 restrictions are lifted next week.”
If administrators are called in, the shops will continue to trade as buyers for the company – or more likely its more successful brands – are lined up. Arcadia currently has around 500 shops.
Non-essential retailers in England have been forced to close for four weeks until 2 December to contain the spread of Covid-19. This followed a longer lockdown earlier in the year.
However, even before the pandemic, Arcadia’s best-known brands such as Topshop were struggling against nimbler online-only fashion retailers like Asos, Boohoo and Pretty Little Thing.
And rival High Street chains like Zara have invested heavily in their digital business while Topshop has been slow to catch up.
In its most recent accounts for the year to 1 September 2018, Arcadia reported a £93.4m pre-tax loss compared to a £164.6m profit in the previous 12 months.
It also said sales fell 4.5% to £1.8bn.
At the time, Arcadia said: “The retail landscape has changed dramatically over recent years and the increased competition from other High Street and online retailers in particular has had a significant impact on our business.”
Richard Lim, chief executive at Retail Economics, said that while all clothing shops have been adversely affected by the pandemic, Arcadia’s “demise has been accelerated because of an online proposition that falls way behind that of their competitors”.
“Years of underinvestment in the digital channel has severely restricted their ability to trade successfully through this hugely difficult period,” he said.
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Other sources of revenue at Arcadia have also come under pressure this year, such as Debenhams, which sells a number of Sir Philip’s brands through concessions at its department stores.
Debenhams is in administration and is currently in talks to find a buyer.
As with many High Street chains that had to go into lockdown, Arcadia placed many of the group’s 13,000 workers on furlough.
Sir Philip is unlikely to buy back any of his brands if it does go into administration, which was first reported by Sky News.
Arcadia underwent restructuring last year when it agreed to shut 50 shops.
As part of that deal, the company secured a rent cut with its landlords on property as well as an agreement with the Pension Protection Fund to put money into the company’s pension schemes.