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Sunday 05 July 2020


Green poised for Arcadia restructure: reports

Written by Hannah McGrath

Retail billionaire Philip Green is reportedly mulling plans to restructure Arcadia group’s finances through a Company Voluntary Arrangement (CVA).

Sky News reported this morning that Green could put forward plans for the restructuring plan for his Arcadia empire - which includes Topshop, Dorothy Perkins as Miss Selfridge - as soon as next month.

If Green and his advisers do get the go ahead for any CVA, it could entail job losses and store closures as the company seeks to return itself to a stable financial footing, Sky News suggested.

A CVA is a form of insolvency process, whereby a company makes proposals to unsecured creditors and landlords and sets out the consequences for the company should the arrangement not be approved. In order to pass, the agreement needs to be approved by 75 per cent of the company’s creditors.

Arcadia is expected to begin discussions with landlords and property agents in the coming weeks with a view to launching the restructuring programme in late April or early May, but sources told the broadcaster that the plan could be delayed or halted altogether depending on talks with shareholders.

A spokesman for Arcadia Group said:"“Within an exceptionally challenging retail market and given the continued pressures that are specific to the UK high street we are exploring several options to enable the business to operate in a more efficient manner.

"None of the options being explored involve a significant number of redundancies or store closures. The business continues to operate as usual including all payments being made to suppliers as normal.”

The reports come after a string of retailers including House of Fraser, Paperchase, Mothercare and New Look opted to approach their landlords as part of CVA arrangements in the last year as the High Street continues to be battered by declining footfall, rising business rates and rents costs amidst a wider shift to online shopping.

Figures obtained by Altus showed that taxpayers footed a £300 million bill in payouts to staff who had lost their jobs as a result of retail insolvencies in 2018, with the cost of cases processed by the The Insolvency Service up 31 per cent compared to 2017.

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