Euronews is no longer accessible on Internet Explorer. This browser is not updated by Microsoft and does not support the last technical evolutions. We encourage you to use another browser, such as Edge, Safari, Google Chrome or Mozilla Firefox.

BREAKING NEWS

BREAKING NEWS

Philip Green's Arcadia faces key vote as administration looms

Philip Green's Arcadia faces key vote as administration looms
FILE PHOTO: People walk past a Topshop and Topman store, owned by Arcadia Group, in central London, Britain June 5, 2019. REUTERS/Henry Nicholls -
Copyright
HENRY NICHOLLS(Reuters)
Text size Aa Aa

LONDON (Reuters) – Creditors will decide the fate of Philip Green’s Arcadia group and its 18,000 workers at a vote on Wednesday on a sweetened restructuring plan to save the British fashion retailer.

If the creditors, including landlords, fail to support Green’s plan for his group – which includes the Topshop and Dorothy Perkins brands – then it will likely collapse into administration.

A week ago a creditors’ meeting was adjourned after several landlords chose not to back a plan which would close stores, cut rents and make changes to the funding of the group’s pension schemes.

Green responded on Friday by offering better terms to landlords, with the costs met by Tina Green – his Monaco-based wife and the ultimate owner of the group.

But it is not clear if the terms have been sweetened enough to sway dissenting landlords.

Arcadia’s main landlords are British Land, Intu Properties, Aviva, M&G, Land Securities, Aberdeen Standard and Legal & General

Green’s plan involves closing about 50 of Arcadia’s 566 UK and Irish stores and rent reductions of 25% to 50% across 194 locations over three years.

It will also see Tina Green invest 50 million pounds ($64 million) of equity into the group and provide affected landlords with the right to a pro-rata share of 20% of any equity value in the group from a future sale.

Landlords will also be able to claim from a 40 million pounds creditor fund.

Arcadia will provide 210 million pounds of security over assets for its pension schemes to help close a funding deficit, while Tina Green would also contribute 100 million pounds to the schemes over three years.

Arcadia will cut its annual contributions to its pension schemes to 25 million pounds from 50 million pounds for three years.

The company has said that if the plan, consisting of seven Company Voluntary Arrangements (CVA), covering all its brands – Topshop, Topman, Burton Menswear, Dorothy Perkins, Evans, Miss Selfridge and Wallis – is not passed the whole group will probably be placed into administration.

An Arcadia administration would be the UK retail sector’s biggest casualty since the collapse of department store chain BHS in 2016. Green had sold BHS to a collection of little-known investors for a nominal sum of a pound the previous year.

It would also mark a dramatic fall from grace for the entrepreneur once known as the “king of the high street”.

(Reporting by James Davey, editing by Deepa Babington)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.