Is Sir Philip Green planning to break up Arcadia?
Reports have emerged this weekend that Sir Philip Green could be planning a break up of his fashion retail empire Arcadia.
Last week the retail tycoon saw off the last obstacle to carrying out his CVA plans for the business – a legal challenge from US landlords was dropped – which enables store closures and rent reduction deals to be implemented.
The CVA plans include the closure of 23 stores in the UK and all of its 11 stores in the US. A further 25 Evans and Miss Selfridge stores will close as part of a separate process.
Now Arcadia is said to be untangling shared services across brands such as IT, finance and HR to enable them to be sold off separately in due course, the Sunday Times reports.
Any sale process would be gradual (sources told the Sunday Times that the group was certainly not carrying out a "fire sale") and Sir Philip would need to be mindful of commitments he made to the Pensions Regulator in a bid to secure Arcadia's CVA.
The business has a pension deficit of £750m and Green has promised to put up to £385m into the funds over the next three years. Sir Philip and his wife Lady Tina were also obliged to offer landlords a 20% stake in the business in return for their support of the CVAs, which would be realised in the event of a sale.
The Arcadia empire employs around 20,000 staff and operates more that 550 stores across its brands which include Burton, Dorothy Perkins, Evans, Miss Selfridge, Outfit, Outfit Kids, Topman, Topshop and Wallis.
Of these Topshop and Topman are the most attractive brands and industry watchers have long been speculating that should the company be willing to sell its brands separately then these were the most likely to attract buyers.
Topshop and Topman have also been bolstering their businesses with deals to sell the brands on third-party sites, such as Shop Direct's Very.co.uk and Littlewoods.com.
Should the sale process go ahead it is likely to represent the denouement of 67-year-old Sir Philip Green's career in retail.
