The future of Sir Philip Green’s retail empire Arcadia Group is hanging in the balance, with a vote on a series of cost-cutting measures due to take place on Wednesday afternoon. Miss Selfridge, Wallis and Evans are also at risk of closures. Sir Philip is understood to have secured major support to save his group after agreeing to inject an additional £25million into its pension fund. The Pensions Regulator (TPR) had previously demanded Sir Philip top up his contribution if it was to support a company voluntary arrangement (CVA).
The business tycoon is now believed to have received the backing of regulators after proposing a cash and security package worth £310million.
Arcadia, which has nearly 10,000 pension scheme members, said a voluntary cash contribution of £100million had been pledged alongside £210million in security.
The Pension Protection Fund (PPF) is due to vote on whether to support the scheme on Wednesday.
Arcadia needs 75 percent of creditors to approve the store closures.
The Pensions Regulator said: “We are pleased that additional security has been agreed in support for the pension schemes which brings the total security value to £210million.
“This is in addition to agreed contributions of £100million to be paid to the schemes by Lady Green.
“Given this enhanced level of support, we now consider the updated CVA proposals are sufficient because they provide better protection for scheme members in these difficult circumstances.
“We recognise that the best support for any pension scheme is a trading employer and we feel the CVA proposals now provide the right balance between security for the pension schemes and the chance of sustainability for the company.”
Oliver Morley, chief executive of the PPF, told the BBC the body “will now vote in support of the Arcadia Group Limited CVA”.
If the CVA confirmed almost 50 stores will close – including Topshop, Topman, Burton, Dorothy Perkins, Miss Selfridge, Wallis and Evans – and rents on nearly 200 shops will be slashed.
Arcadia had initially announced plans to close 23 stores across the UK and Ireland as part of a major restructure.
But in an update last week, it emerged 25 more stores will go on top of this original list, under separate insolvency proceedings, with Miss Selfirdge and Evans bearing the brunt of the closures.
The group announced last week it will also say goodbye to its portfolio of 11 Topshop and Topman stores in the United States.
As part of the CVA to shut the original list of 23 stores, Lady Green, wife of Sir Philip and ultimate owner of Arcadia, has offered landlords a 20 percent stake of any proceeds if the group is eventually sold.
The Trustees of the Arcadia Pension Schemes said: “The Trustees of the Arcadia Pension Schemes wish to thank Lady Cristina Green for the voluntary £100m cash support that she has announced, which alongside the £210million in security being provided to the schemes materially enhances the security of the benefits of the 9,500 Pension Scheme members.
“Having engaged extensively with the Pensions Regulator, the Pension Protection Fund and the Arcadia Board to consider its turnaround plan, the total package of support announced provides the best outcome achievable for the Schemes.”
Ian Grabiner, CEO of Arcadia Group, said: “We hope that the landlords and other creditors will follow suit and we can get the company back on a strong footing in all the markets where we trade.
“We would like to thank everyone involved including our lenders, the trustees, TPR and PPF for all their hard work over the last few weeks.
“The Board would also like to thank all of our staff for their hard work and support during this challenging time.”