TOPSHOP’S future lies in the balance as boss Philip Green desperately needs to win support for his survival plan at a meeting with creditors today.
Arcadia Group, the struggling company behind Burton, Dorothy Perkins, Evans, Miss Selfridge, Topshop, and Wallis wants to use Company Voluntary Arrangements (CVAs) in a bid to save it – but stakeholders will have to agree on plans first.
If they can’t agree, the business could fall into administration, the tycoon has reportedly told the BBC.
Creditors will vote on seven separate CVA proposals today, deciding the fate of 18,000 employees.
They first voted on the proposals last week, but after a knife-edge vote where some of the plans were rejected, Arcadia adjourned the meeting to today.
It is understood that only those proposals that didn’t receive enough support last week will be voted on again.
The first CVA meeting was adjourned after it became clear several landlords intended to vote against the plans, which include at least 23 store closures across the group.
A further 25 Miss Selfridge and Evans stores have also been earmarked for closure as part of a restructuring process that is separate to the CVAs.
In a bid to win support from landlords, Philip Green has proposed to impose less severe rent cuts than originally planned, from between 30 per cent to 70 per cent to a range of 25 per cent to 50 per cent.
‘The future of Arcadia is by no means certain’
Chris Field, independent retail analyst and chairman of Retail Connections, told The Sun: “I think they’ll reject Philip Green’s current rescue deal and there will be more discussions, but at some point, the landlords and shareholders are going to have to accept some kind of a deal.
“The UK retail environment is still a difficult one and, inevitably, there will be some casualties as the High Street reinvents itself.”
“While the deal remains on a knife edge – and I do foresee the investors turning the knife on the deal – the outcome of Sir Philip’s retail empire is by no means certain.”
Speaking to the Press Association, one landlord said the Arcadia CVA plans are different to previous ones from House of Fraser and Debenhams because the smaller units would be easier to fill with new occupiers.
“There was some sympathy for Debenhams,” he 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.”
It is understood that shopping centre owner Intu plans to vote against the rescue plans.
Without the backing of the property giant, which owns the Trafford Centre in Manchester and the Lakeside in Essex, the vote is set to be a close one for Arcadia.
In the Commons on Tuesday, 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.”
Retail tycoon Green is estimated to have lost his billionaire status with his fortune believed to have halved in a year amid a series of explosive scandals.
The Sunday Times Rich List has his fortune free-falling £1.05billion in a year to £950million because of a pension black hole in his “crumbling” Arcadia empire.
But the plummet still places Sir Philip and wife Tina at 156th on the list, down from joint 66th some 12 months earlier.
The Arcadia Group – which includes Topshop, Burton and Dorothy Perkins – was valued as worthless in this year’s list, as the company copes with a pension debt which hit £565million.
The couple’s stake in the company was last year valued at £750million, while the compilers also removed £300million from their worth to allow the shoring up of the shortfall.
With his wealth peaking at almost £5billion in 2007, it is the first time in 17 years that Sir Philip has not been listed as a billionaire.
The devaluation comes after sustained criticism against Sir Philip and calls for him to lose his knighthood.
He was lambasted over the collapse of BHS, affecting 11,000 jobs, 19,000 pension holders and leaving a £571million in the pension scheme.
The businessman, who sold the department store chain to Dominic Chappell for £1 before it plunged into administration, agreed to pay £363million towards the deficit.
Sir Philip has also faced a slew of allegations, including of groping a female executive and making a racial slur at an employee.
The Croydon-born entrepreneur denied his behaviour was criminal or amounted to gross misconduct.
The Sun contacted Arcadia Group for a comment.
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