Real Estate

Philip Green’s Arcadia secures go-ahead for restructuring plan


Philip Green’s Arcadia fashion group has secured backing for a controversial restructuring plan after a meeting of creditors voted to approve it.

The owner of brands such as Topshop and Wallis needed three-quarters of its unsecured creditors to back the plan, known as a company voluntary arrangement. At a meeting in London, Arcadia received that — although the company did not immediately divulge by what margin.

The move clears the way for 23 stores to close outright, with rents reduced by up to 70 per cent on 194 more.

“We are extremely grateful to our creditors for supporting these proposals and to Lady Green for her continued support,” said Ian Grabiner, Arcadia’s chief executive.

He was referring to a last-minute compromise on the part of Sir Philip and his wife, whereby they reimbursed the worst-affected landlords to limit rent cuts to 50 per cent. The move helped sway the latest vote despite the opposition of Intu, one of the company’s biggest landlords. Lady Tina has also financed a separate agreement with the UK’s Pensions Regulator.

“From today, with the right structure in place to reduce our cost base and create a stable financial platform for the group, we can execute our business turnaround plan to drive growth through our digital and wholesale channels, while ensuring our store portfolio remains at the heart of our customer offer,” Mr Grabiner added.

A similar meeting last week had to be adjourned after it became clear that not all of the schemes — there are seven CVAs in all — would secure the requisite support. Many property companies bitterly resented the terms of the CVA, saying that it was opportunistic and forced creditors to foot the bill for years of under-investment in the core operations.

Arcadia has said it will invest £135m over three years in refurbishing stores, improving its website and building more distribution capability. But this represents a lower rate of capital spending than seen in previous years and is being financed by improved profit and cash flow, not new investment into the business.

Landlords who voted in favour of the plan will share around £40m from a compensation fund, and if Arcadia is sold in the future they will also take 20 per cent of any equity value ascribed to it.



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