Green expected to launch Arcadia restructuring within weeks
SIR PHILIP GREEN is edging closer to a radical restructuring of his Arcadia retail empire in a move that could result in store closures and job losses.
The retail billionaire and his advisers are understood to be in talks about entering a company voluntary arrangement (CVA), an insolvency process that would require the approval of creditors. Formal discussions could begin in weeks. Pension trustees would also need to approve a CVA and could therefore attempt to win significant concessions from Sir Philip before agreeing to plans. The deficit in the company’s pension funds stood at almost £1bn in 2016 but is likely to have fallen since then.
The Daily Telegraph reported in January that Sir Philip had begun a review of Arcadia, with Deloitte brought in as adviser. EY is advising the company’s pension trustees. Although a formal decision has not yet been taken, a restructuring is expected to be announced in late April or early May, Sky News reported yesterday.
The company yesterday confirmed it was reviewing the business. “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,” Arcadia said.
“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,” it added.
Revamping its chains would mark a turning point for the company, which has about 570 stores as well as concessions in a further 500 outlets, and employs 26,000 people. Its brands include Topshop, Topman, Dorothy Perkins and Miss Selfridge.
A restructuring of Arcadia would add to the long list of retailers hit by falling footfall on the high street and the rise of online upstarts. Other factors include a squeeze on consumers’ income and the rising costs of rents, wages and business rates.
CVAS have become more widespread in the past year as a result and have been used by Carpetright, Mothercare and New Look to close unviable stores.
Sir Philip has shut around a fifth of his UK stores in the past two years. These include 210 standalone stores, double occupancy shops and concessions.