Arcadia postpones knife-edge vote on store closure plans
Sir Philip Green’s Arcadia group has delayed a crunch vote on its restructuring plans, as the retailer remains locked in negotiations with landlords.
The company said on Wednesday that it would adjourn a meeting of suppliers, landlords and other creditors voting on seven company voluntary arrangements (CVAs) until June 12.
It said this would give it more time to discuss the plans with landlords, amid reports that several shop-owners were not happy with the arrangements.
Ian Grabiner, CEO of Arcadia, said: “It is in the interests of all stakeholders that we adjourn today’s meetings to continue our discussions with landlords.
“We believe that with this adjournment, there is a reasonable prospect of reaching an agreement that the majority of landlords will support.”
It emerged last month that some shop-owners were demanding further cash investment in the business in exchange for their backing.
The delay leaves the firm’s future hanging in the balance, after it told landlords that it risked administration without the restructuring.
The business employs 18,000 people, all of whom could face redundancy if it collapses.
The proposals, which were launched last month, involve the closure of 23 stores in the UK and Ireland.
Another 11 Topshop and Topman stores in the US were earmarked for closure, while an additional 25 Miss Selfridge and Evans stores were also slated to be axed.
The initial plans also included a reduction in the company’s contributions to its pension fund, alongside a fresh injection of cash into the scheme.
However Arcadia agreed with the pensions watchdog on Tuesday that Sir Philip would contribute another £25 million, bringing the total cash and security package to the value of £310 million.
Speculation began early this year that Sir Philip would look to either sell off the company or close stores.
In March, Arcadia confirmed it was exploring options to improve efficiency in the business.
Later that month, it hired property advisers to assess its estate while drawing up restructuring plans.
In April, US investor Leonard Green & Partners sold its 25% stake in Topshop and Topman back to the parent company, in a move which Arcadia said simplified its structure and would allow the board to focus on restructuring.
The news comes just weeks after Sir Philip failed to appear on the Sunday Times Rich List for the first time in 17 years.
His reputation has been left damaged by the 2016 collapse of BHS, which resulted in the loss of 11,000 jobs.
The tycoon faced criticism for his handling of the retailer and eventually agreed to pay £363 million of his own money into the its pension pot.