Arcadia ‘presents cost cutting plan to pensions regulator’

Arcadia Group is set to embark on a wide-ranging restructure of its businesses as the Coronavirus pandemic continues to batter the UK High Street.

Philip Green’s retail empire - which includes Topshop, Burton, Dorothy Perkins and Miss Selfridge - has presented a plan to reduce costs to The Pensions Regulator, according to reports in the Sunday Times.

The approval of the regulator is key to the rescue deal, due to the £727 million deficit in Arcadia’s pension funds.

Earlier this month, the company cut 500 head office jobs from its head office workforce of 2,500, the majority of whom had been put on furlough as the crisis deepened and its 550 stores closed under government lockdown restrictions.

At the height of the crisis, the company placed 14,500 of its 16,000 staff on furlough.

The rescue plan comes just over a year after the company launched a Company Voluntary Arrangement (CVA) which resulted in 23 store closures and renegotiated rents with landlords on hundreds of stores.

The Pension Protection Fund took security of £210 million of Arcadia assets and required Green to pay £100 million into the pension funds over the course of three years, in support of the CVA last June.

In March, the regulator allowed a pause to the group’s deficit repayments to allow it to protect its cash reserves.

Retail Systems has contacted Arcadia for comment.

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