Sir Philip Green’s Arcadia empire is hanging in the balance as the business goes back to face its landlords and creditors with a revised CVA deal today.
After last week’s vote was dramatically adjourned at the last minute after it became clear it would not muster enough support from landlords, the retail tycoon has attempted to win them over by reducing rent cut demands and agreeing to plough a further £10m per year into the business to help offset the cuts.
However, speaking on the eve of the vote, one landlord has said there are “no tears for Philip Green” and another, Intu, has already indicated that it will not be backing the revised deal.
The unnamed landlord explained that landlords feel that the units occupied by Arcadia stores would be much easier to re-let than, say, those much larger units occupied by Debenhams which recently had its CVA approved.
Arcadia is seeking to close 23 stores via the CVA (a further insolvency process will result in a further 25 Miss Selfridge and Evans stores closing).
“There was some sympathy for Debenhams,” the unnamed landlord said. “Whereas here you’ve got a bigger pool of potential tenants. You’ve got more options so it’s easier to vote against it. Not that many people are that emotional about it. There’s no tears for Philip Green.”
Intu, which operates some of the UK’s best known shopping centres including Lakeside and Manchester’s shopping centre, is landlord to 35 Arcadia stores, of which 70% are Topshops. Intu is reported to believe that Topshop would survive an administration process and find a new buyer if it came up for sale.
Without the backing of Intu, which controls 15% of the vote, it it touch and go whether the deal will get through. To pass its series of CVAs Arcadia needs secure 75% of creditors’ backing by value.
It is understood that today’s vote will only focus on those proposals that did not receive enough support at the previous meeting.
Some 18,000 are at risk at Arcadia and the matter was raised in the House of Commons yesterday.
Business Minister Kelly Tolhurst, answering a question from Labour’s Jenny Chapman, said: “We stand ready to do what we can along with my colleagues in MHCLG (Ministry of Housing, Communities and Local Government) if closures occur.
“We are working with the Retail Sector Council and we’re committed to making sure we are working with the retail sector and high streets to make sure we can really truly grow our high streets and protect retail for the future.”
Additional reporting: The Press Association.