Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We use cookies to personalise your experience; learn more in our Privacy and Cookie Policy. You can opt out of some cookies by adjusting your browser settings; see the cookie policy for details. By using this site, you agree to our use of cookies.

Arcadia CVA pushed through

Arcadia creditors have approved all seven of the group’s company voluntary arrangement (CVA) proposals.

The group’s majority shareholder, Lady Green, will invest a further £50m of equity into Arcadia if the CVAs remain unchallenged, in addition to the £50m of funding already provided in March.

Lady Green has also agreed to fund the cost of the amended rental reduction terms within the CVA proposals, as announced on 7 June.

Separately, the group has reached an agreement with the trustees of the pension schemes, the Pensions Regulator and the Pension Protection Fund, to reduce its deficit repair contributions from £50m to £25m per year, for three years, with security granted to the value of £210m over certain assets of the group.

As previously announced, Lady Green will provide an additional £100m of cash into the schemes to help bridge the shortfall, with funding of £25m per year for the next three years, plus an additional £25m contribution.

The creditors first met on 5 June to vote on the CVA proposals, but Arcadia was forced to reconvene the meeting to give it time to “conduct further dialogue with a few landlords”, after it became obvious that not all of the CVAs would be approved.

In a bid to win landlord support, Arcadia then reduced the level of rent reductions required under the CVAs.

Previously, the group had requested a reduction of between 30% and 70% across 194 of its 566 UK and Irish stores over a three-year period. This was revised to between 25% and 50%. Lady Green offered to make up the shortfall – expected to amount to £9.5m in the first year. 

Under the terms of the CVAs, Arcadia will close 23 out of its UK and Irish stores. 

Alongside the CVA, Arcadia plans to put two subsidiaries into administration, resulting in a further 25 store closures. Six Miss Selfridge stores and 19 Evans stores will also be affected by the expected administrations of both property companies.

The rest of its stores will remain open and trading as normal, and the group’s online sales channels “will be completely unaffected by the proposed changes”.

The group will also close all eleven Topshop Topman stores in the US.

Ian Grabiner, CEO of Arcadia Group, 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.

“Finally, I would like to thank all of our team and advisors for their support throughout the CVA process. It has been incredibly challenging for all concerned but I believe this is the right outcome for all our creditors.”


Readers' comments (3)

  • They'll be at it again in a couple of years unless they invest in the value of their brands rather than stripping out quality chasing intake margin, which ends up being marked down anyway so the margin is lost.
    Although for many of the brands I feel It's too late and all the value is gone. They'd almost be better off investing in a Chelsea Girl/Concept Man to River Island style re-brand with some of them.

    Unsuitable or offensive? Report this comment

  • darren hoggett

    The landlords have caved in yet again. If they weren't seen as such a soft touch, then maybe we wouldn't have the amount of CVA's were currently have. Expect another CVA within a year.

    While I'm sure some Landlords are charging too much, it is not their fault that their tenants can't run their businesses properly.

    Is Arcadia worth saving? Top Man/Shop aside, probably not.

    Unsuitable or offensive? Report this comment

  • When is Darren getting a regular column? He's not afraid to say it how it is.

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.