Arcadia has set out a recovery plan focused on digital growth and developing new avenues to market, Retail Week can reveal.
The retailer, which launched a CVA last night, set out its turnaround ambitions in a business and recovery plan circulated to creditors, and seen by Retail Week.
By implementing the plans, Arcadia, controlled by tycoon Sir Philip Green, aims to restore EBITDA from around £30m in 2018/19 to £80m in 2019/2020 and £117m in 2021/22.
The turnaround programme is built on four pillars: aggressively driving digital growth; doubling business-to-business revenue such as wholesale; boosting footfall; and driving cost efficiencies.
Arcadia will improve its digital operations through initiatives to enhance customer experience and conversion rates, and by pursuing “digital external business opportunities”.
It plans to double business-to-business sales by building on existing relationships with key partners and developing new strategic partnerships.
The retailer will seek to draw more customers into its shops by improving availability – a new fulfilment centre will open in Daventry later this year – and develop a programme to woo digital customers into its branches.
The Miss Selfridge and Evans operating companies both intend to grow their wholesale, digital and concession businesses. Both will also reduce their retail store portfolios “significantly” in the short term. Arcadia said potential sales of all or parts of the business would also be considered during the CVA period.
Arcadia’s plan states that “the retail landscape is volatile and that there are a number of risk factors that may need to be overcome” but it believed it built in sufficient contingency into its strategy and that it had sufficient headroom to maintain the liquidity needed to deliver.
Creditors will vote on Arcadia’s CVA on June 5.