Arcadia plans to cut a fifth of its head office staff in a bid to cut costs following the coronavirus pandemic.

The embattled fashion group told staff in an email this morning that the restructuring will affect around 500 of its 2,500-strong head office workforce.

The move will reportedly affect teams including buying and design at Topshop, Miss Selfridge and Dorothy Perkins.

An email sent by chief executive Ian Grabiner to staff and seen by Drapers said: “We are continuing to live through an unprecedented global crisis and, as you know, our stores and head office temporarily closed on March 20. Although our digital platforms provided us with some much-needed sales whilst our stores were closed, it certainly didn’t make up for the loss of sales from our stores and franchise partners.

“We and our partners are unlikely to see the same level of footfall on the high street anytime soon. We can’t ignore the impact this will have on our business and we need to adapt. We have already been reducing our store estate over the last few years but we also need to generate further cost savings across our company in order to ensure we have a solid foundation for the future. In order for us to achieve this, we need to restructure our head office to support a more focused and future-proofed organisation.”

Arcadia said in a statement: “Due to the impact of Covid-19 on our business including the closure for over three months of all our stores and head offices, we have today informed staff of the need to restructure our head offices. This restructuring is essential to ensure that we operate as efficiently as possible during these very challenging times.

“Sadly, it is likely to result in a reduction of approximately 500 of our 2,500 head office workforce. We deeply regret the impact this will have on those individuals affected and will do everything we can to support them.”

During the crisis, Arcadia furloughed almost all head office staff and closed its doors to the public. While stores have now reopened across the UK, the retailer will continue to be affected by the lack of demand for fashion. 

Read more: Deep dive - Can fashion ever recover from coronavirus?

UK fashion sales will fall between 35% and 46% in 2020, according to McKinsey, which predicts that a third of global fashion players will not survive the coronavirus crisis. Read our latest deep dive to discover what’s next for the hard-hit clothing sector.