Arcadia’s plans to shutter stores, slash rents and axe hundreds of jobs have come under fire just hours after they were unveiled.
Sir Philip Green’s fashion empire launched a CVA yesterday, which it said would involve 23 store closures, rent reductions at 194 other shops and the potential closure or disposal of all 11 stores in the US.
As part of the restructuring proposals, which will be voted on by creditors on June 5, Arcadia said it would reduce its annual contributions to its pension schemes from £50m to £25m.
Green’s wife and major shareholder Lady Tina Green would pump £100m into the scheme over the next three years to help address the shortfall, as part of the CVA agreement.
But the Pensions Regulator has hit out at those plans, dealing a blow to Green’s hopes of securing the required backing of 75% of Arcadia’s creditor base at the crunch ballot next month.
The Pensions Regulator said: “We do not consider the proposals are sufficient to ensure that members of the scheme are adequately protected.”
As reported by Retail Week yesterday, Arcadia – owner of the Topshop, Burton, Miss Selfridge, Dorothy Perkins, Wallis and Evans brands – had been encouraged by the reaction of property owners to its proposals.
Sources close to Arcadia’s discussions said “most” major landlords had been “really supportive” of its CVA plan.
However, some landlords are “reviewing the detail” of the CVA over concerns that some areas need “further clarity” from the group.
Investment bank and advisory firm PJT, which is representing a group of landlords including Hammerson and British Land, said: “PJT, on behalf of a group of landlords, has engaged with Arcadia with the aim of agreeing terms on a consensual restructuring to secure the long term future of the business.
“As a result of this, there have been substantial improvements made to the CVA announced today which benefit all landlords, however there are still areas that need further clarity.
“We are now reviewing the detail of the CVA proposal and look forward to continued engagement to ensure a satisfactory outcome for the company, its employees, pensioners, suppliers and all its creditors.”
Arcadia to shutter 23 stores in CVA plan
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Arcadia CVA plan slammed by Pensions Regulator