Arcadia’s knife-edge vote to decide future of 18,000 jobs
One landlord said ‘there’s no tears for Philip Green’.
Sir Philip Green’s retail empire faces a make-or-break vote on its future on Wednesday as it seeks approval for its restructuring plans, deciding the fate of 18,000 employees.
Arcadia, the company behind Topshop, Wallis, Burton and a raft of other brands, will reconvene a meeting to vote on seven separate company voluntary arrangement (CVA) proposals.
The votes are for creditors – primarily landlords of the stores – who must either agree to cut their rents by approving the deal, or risk the collapse of Arcadia, leaving them with empty sites and no rent.
Voting was supposed to take place last Wednesday, but was postponed when it became clear that some of the CVA proposals were heading for failure without more concessions from Sir Philip and Arcadia.
It is understood that only those proposals which did not receive enough support at a previous meeting last week will be voted on again.
If passed at a meeting in central London at 12pm on Wednesday, at least 23 stores will close.
A further 25 Miss Selfridge and Evans outlets have also been earmarked for closure as part of a restructuring process that is separate from the CVAs.
Sir Philip has since offered a concession to landlords in a bid to sweeten the deal, proposing to impose less severe rent cuts than originally planned.
Under the initial proposals, shop owners were facing rent reductions of between 30% and 70%. This will now be reduced to a range of 25% to 50%.
It remains to be seen whether enough property owners will be convinced to support the process.
Speaking to the Press Association, one landlord said the Arcadia CVA plans are different from previous ones from House of Fraser or Debenhams because the smaller units would be easier to fill with new occupiers.
“There was some sympathy for Debenhams,” he said.
“Whereas here you’ve got a bigger pool of potential tenants. You’ve got more options so it’s easier to vote against it.
“Not that many people are that emotional about it – there’s no tears for Philip Green.”
We’re committed to making sure we are working with the retail sector and high streets to make sure we can really truly grow our high streets and protect retail for the future Business Minister Kelly Tolhurst
On Tuesday, Sky News reported that shopping centre owner Intu remained unconvinced by the proposals and was planning to vote against them.
Without the backing of the property giant, which owns the Trafford Centre in Manchester and Lakeside in Essex, the vote is set to be a close one for Arcadia.
In the House of Commons on Tuesday, Business Minister Kelly Tolhurst, answering a question from Labour’s Jenny Chapman, said: “We stand ready to do what we can along with my colleagues in MHCLG (Ministry of Housing, Communities and Local Government) if closures occur.
“We are working with the Retail Sector Council and we’re committed to making sure we are working with the retail sector and high streets to make sure we can really truly grow our high streets and protect retail for the future.”
Some landlords are concerned that, by agreeing to cut Arcadia’s rent bills, other rival chains may start demanding rent cuts of their own.