Sir Philip Green’s embattled Arcadia fashion empire is expected to be thrown a lifeline tomorrow when creditors vote on controversial CVA proposals.

Retail Week has learned that trade creditors have unanimously swung behind Arcadia’s CVA plan, which will allow the Topshop-to-Dorothy Perkins group to slash costs and launch a turnaround programme as it battles for breath in a hard-fought fashion retail environment.

The CVA is a humbling moment for tycoon Green, who once dominated the apparel retail landscape, but has had to take emergency measures as shoppers deserted his brands and he became mired in personal controversy.


Sir Philip Green intends to trim Arcadia’s store portfolio by around 50 shops

However, the likely support of creditors, including the pensions authorities, which have been swayed by a last-minute injection of additional security, means  he has a chance to reform his ailing empire.

Green intends to trim the group’s store portfolio by around 50 shops and cut rental costs on almost 200 more, as well as focusing investment in building online appeal and switching the focus of some of his brands to wholesale rather than retail.

The support of trade creditors and pension bodies – the Pensions Regulator and the Pension Protection Fund – means that Arcadia’s CVA is most likely to be given the green light, even if property companies vote against the plans.

Retail Week understands some big landlords may yet vote against the proposals, but their objections could end up being purely symbolic.

However, if their anger swells, the CVA could still be in jeopardy. At least two of the UK’s largest landlords will be leaving it until the morning of the vote to make a decision.

Arcadia said it has struck an arrangement to provide security for pension schemes “to the value of £210m, which includes an additional £25m agreed with [the Pensions Regulator]” and Green’s wife, Lady Green, which provides ”as agreed a voluntary contribution of £75m over three years plus an addition of £25m making a total of £100m”.

“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”

Ian Grabiner, Arcadia

The Arcadia pension schemes trustees said the deal “materially enhances the security of the benefits of the 9,500 pension scheme members”.

They said: “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 provides the best outcome achievable for the schemes.”

Arcadia chief executive Ian Grabiner added: “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.”

No comment was immediately available from other creditors, or from Arcadia about how those creditors might vote.