Lucy Powell MP, Labour's shadow minister for business and consumers, called on the Monaco-based billionaire to "do what is right and cover Arcadia's pension deficit", and said the Government needs to do more for small businesses left in the lurch.
It stressed its brands "continue to trade" and its stores will be opening again in England as soon as coronavirus restrictions are lifted next week.
Like others in the sector, Arcadia's brands, which also include Burton, Miss Selfridge and Dorothy Perkins, have suffered during the coronavirus pandemic and the associated restrictions across the United Kingdom and Ireland, including two national lockdowns in England. The retail group has been battling to restructure its business since previous year and wrote in an emailed statement on Friday that it's exploring "a number of contingency options" after Covid-19 "had a material impact on trading across our businesses".
As reported by Sky News the high street retail giant, which is owned by Sir Philip Green, could appoint administrators from Deloitte as early as next week and quoted a retail industry figure as stating that the collapse had become inevitable after discussions with lenders about an emergency £30m loan ended in failure.
A source close to Fraser said the proposed refinancing was likely to take the form of a secured loan and was meant to prevent Arcadia - which owns Burton and Dorothy Parkin - from entering the administration.
Further reporting is expected on Monday.
Monaco resident Sir Philip and Mr Ashley - known as "Masher" to his inner circle - are former friends, but tension between the two has grown as their high street rivalry intensified.
It said Green is unlikely to seek to buy back any of Arcadia's trading operations from administrators.
The collapse of the organization will capture one of the most spectacular implementations in recent corporate history.
Sir Philip later bought it for just $ 1.
His reputation was badly damaged by the collapse of department store chain BHS in 2016 and its aftermath.
About a year later, BHS collapsed, costing 11,000 people their jobs and leaving a pension deficit of around GBP571 million. Lady Green is due to inject £50 million to revitalise the company and its retirement fund.
Sir Philip's tragic time was not limited to the pursuit of his business interests.