All seven of troubled retail group Arcadia’s proposed Company Voluntary Arrangements have been approved by the required majority of the companies’ creditors, including pension trustees, suppliers and landlords.
The group’s roster of brands comprises high street staples Burton, Dorothy Perkins, Evans, Miss Selfridge, Outfit, Topshop and Wallis.
Agreement of the CVAs means an initial closure programme of 23 stores across the UK and Ireland will now be implemented. One of these is in the North West, the Topshop/Topman in Ashton-under-Lyne. A further 25 stores will be closed in a further phase of cost-cutting.
As outlined in the CVA proposals – one for each Arcadia brand – the passing of the CVAs means that majority shareholder Lady Green will invest £50m of equity into the group, following a £50m slug of funding provided in March.
Arcadia last week secured the backing of pensions trustees, but Trafford Centre owner Intu was one of the landlords that remained opposed to the deal, voting against.
Ian Grabiner, chief executive of Arcadia, said: “After many months of engaging with all our key stakeholders, taking on board their feedback, and sharing our turnaround plans, the future of Arcadia, our thousands of colleagues, and our extensive supplier base is now on a much firmer footing.
“From today, with the right structure in place to reduce our cost base and create a stable financial platform for the Group, we can execute our business turnaround plan to drive growth through our digital and wholesale channels, while ensuring our store portfolio remains at the heart of our customer offer.”
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 that these owners manage, including many of our savings and pensions. However, ensuring a sustainable future for the UK retail sector is equally critical to both the property and retail sectors.
“Property owners will now want to see Arcadia’s leadership committed to delivering its turnaround plan to restore the long-term health of the business.”
Lady Green, the wife of chairman Sir Philip Green, has also agreed to fund the cost of the amended rental reduction terms within the CVA proposals, as announced on 7 June.
The group, which retail analysts say has lost market share to “fast fashion” both on the high street and online, is carrying out a wholesale slimming-down operation, with the property arms of some brands being put into administration, while its estate of US and Australian stores is being dramatically reduced.