Sir Philip Green’s Arcadia retail empire received the backing from landlords on Wednesday that its company voluntary arrangements (CVAs) had all been voted through.
Under the CVA landlords will receive smaller amounts of rent and there will be 23 store closure with 1,000 jobs at risk, and another 25 stores are set to close as part of wider restructuring.
Arcadia’s chief executive Ian Grabiner said, “We are extremely grateful to our creditors for supporting these proposals and to Lady Green for her continued support.
“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.
“I am confident about the future of Arcadia and our ability to provide our customers with the very best multi-channel experience, deliver the fashion trends that they demand, and ultimately inspire a renewed loyalty to our brands that will support the long-term growth of our business.”
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.”
Chloe Collins, senior retail analyst at Global Data said, Although Arcadia’s CVA has been approved, it is unsurprising that it faced backlash from some landlords who have doubts about the retailer’s future.
“Its leading brands, Topshop and Topman still have a strong following among millennials, however many of the other, such as Miss Selfridge and Dorothy Perkins, are now irrelevant in a highly saturated market and chances of revival are slim, leading landlords to question whether other retailers could offer their spaces more longevity.”