The hard work starts now, says Sir Philip

As landlords back rescue plan for his Arcadia retail empire . . .

SIr Philip Green faces a ‘huge battle’ to turn around his struggling retail empire after narrowly winning support from landlords for a rescue plan that will hand the group a lifeline.

Arcadia, which owns Topshop, Dorothy Perkins, Miss Selfridge and a string of other fashion brands, will now shut about 50 stores and receive rent reductions on 200 more as it scrambles to revive its fortunes.

Under the plan, about 1,000 jobs are at risk, but the group has staved off a total collapse, meaning the vast majority of the 18,000-strong workforce will stay in employment and pensioners will be safeguarded.

Green, 67, had warned that Arcadia would crash into administration if the group did not secure approval for seven company voluntary arrangements (CVA). These are a type of insolvency procedure that allow companies to reduce rent bills, pension contributions and other financial obligations. The idea is to give them breathing space to turn around their fortunes.

Arcadia was forced to postpone a crucial meeting last week after struggling to get enough backing for the CVAs.

But yesterday it won the support of the 75pc of creditors needed for the proposals to go through.

Green, who was not at the meeting, received the news by phone that his rescue plans had been approved.

he told the Mail last night: ‘Thank goodness people have understood what is at stake. Now we need to get on with the job. We’ve got to get the business back in good shape, drive it and just crack on.

‘The hard work begins here. They can have tonight off but it starts tomorrow.’

The former billionaire has pledged to invest £135m over the next three years in Arcadia’s brands, which also include Wallis, evans, Outfit and Burton. About £75m of this is being spent on refurbishing shabby stores.

Green has also signed a partnership deal for Topman and Topshop clothes to be sold on the popular Asos website in the next few months.

The use of CVAs by a string of major retailers, including Mothercare, Debenhams, house Of Fraser and New Look, has become controversial with critics claiming they are being deployed to duck out of obligations.

Melanie Leech, chief executive of the British Property Federation, said: ‘CVAs are never easy as property owners are being asked to absorb large losses, which impacts the investment these owners manage, including many of our savings and pensions.’

Arcadia has suffered an onslaught from fast- growing online firms such as Asos and Boohoo in recent years, as younger shoppers ditch the high Street in favour of the internet.

And last night experts expressed doubts about Green’s proposals to revive the business.

Patrick O’Brien, research director at Global Data, said: ‘I don’t see anything in the plans to suggest a revitalisation of the business. There isn’t enough to invest in stores to halt the sales decline. It looks less like a three-year turnaround and more like a plan for managed decline.

‘The challenge for Arcadia to reverse its decline is huge. every one of its brands has lost market share over the past ten years, with the exception of Outfit.’

The future of Green’s empire was on a knife edge ahead of the vote as one of its biggest landlords, Intu, publicly declared its opposition.

A spokesman said: ‘We firmly believe the terms of the Arcadia CVA are unfair to our full rent-paying tenants and not in the interests of any of our other stakeholders.’

Landlords now have 28 days to appeal the CVA.