Arcadia’s CVA has been approved after today’s second creditor meeting when all seven votes passed muster with landlords, suppliers and the pension authorities.
The business attempted to push the CVA through last week with different terms but was forced to agree to inject more money after at least two of its seven connected CVAs failed to garner the necessary 75% of support required to pass.
Shareholder Lady Green, wife of Sir Philip Green, will now invest £50m into the group dependent on there being no risk of a legal challenge to the CVA.
The group did not disclose what percentage of creditors voted in favour of the procedure, on which Arcadia was advised by Deloitte and property consultancy GCW. It will result in 23 store closures and rent cuts on nearly 200 other stores.
The retailer has agreed with the pension bodies to reduce contributions from £50m to £25m per year.
Sir Philip Green told Retail Week that he was pleased that the CVA had won support.
He said: ”‘The bottom line is the supply chain has been amazing, everyone stayed loyal and supportive. I applaud all the people in the business, who’ve worked fantastically hard 24/7”
The vote went to the wire, as property owners weighed up whether or not to back a CVA.
Green said: ”More landlords understand that voting for it was better than not voting for it”.
The retailer has set out revival plans including ramping up its online proposition and shifting the focus of some brands from retail to wholesale. ”Now we get started,” Green said.
As previously disclosed, Lady Green will provide an additional £100m of cash into the schemes to help bridge the shortfall, with funding of £25m a year for the next three years plus an additional £25m contribution.
Chief executive Ian Grabiner said: “We are extremely grateful to our creditors for supporting these proposals and to Lady Green for her continued support.
“From today, with the right structure in place to reduce our cost base and create a stable financial platform for the group, we can execute our business turnaround plan to drive growth through our digital and wholesale channels, while ensuring our store portfolio remains at the heart of our customer offer.
“I am confident about the future of Arcadia and our ability to provide our customers with the very best multi-channel experience, deliver the fashion trends that they demand, and ultimately inspire a renewed loyalty to our brands that will support the long-term growth of our business.”
Arcadia CVA: Saved today, gone tomorrow?
- Currently reading
Arcadia CVA passes, safeguarding 17,000 jobs