Make-or-break Arcadia vote postponed
Fate of Sir Philip Green’s retail empire, and 18,000 of its employees, hangs in the balance after crunch meeting rescheduled
A vote on Sir Philip Green’s proposal to creditors and landlords aimed at saving his Arcadia retail empire was postponed last night, leaving thousands of the group’s employees in limbo for another week.
The Daily Telegraph understands that “the decision was taken after advisers realised that the Company Voluntary Arrangement (CVA) was close to failing after some heavyweight landlords rejected the plans”.
The crunch vote on the troubled stores, which include Miss Selfridge and TopShop, has now been delayed until next Wednesday.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Describing the move as “quite extraordinary”, The Guardian says “the retail magnate is clearly desperate to use the time to persuade landlords that his offer is better than plunging the whole empire into administration... But this is extremely worrying for its workforce”, which numbers more than 18,000.
While Arcadia has suffered from the wider slump in high street sales, its biggest problem appears to be its massive £170m-a-year rental bill. In a bid to win support for his proposed CVA – an agreement between a company and its creditors which would allow him to reduce his rental bill and close unprofitable stores – Green has offered landlords a 20% stake in the business and a £40m compensation fund.
Similar CVA’s have been used to keep other struggling retailers such as Debenhams and House of Fraser alive and “up to now, landlords have largely been forced to accept that in the current retail climate, having a tenant paying anything at all is better than having the building stand empty”, says BBC business editor Simon Jack.
“But some industry insiders say that many landlords have been looking for a moment to hold the line and there’s a chance this could be it,” he says.
“They also reasoned that if Sir Philip secured the big rental discounts he’s after then other tenants would demand the same, and perhaps threaten to follow him down the CVA route in time,” writes James Moore in The Independent.
The Telegraph reports “there was also some incentive for some landlords to see Arcadia fail and re-emerge out of administration with just its strongest brands, such as Topshop, which had a better chance of long term survival”.
But Moore says it is “fair to question the role [Green] personally played in all this too, with his aggressive, abrasive style of doing business and the demands he’s made of landlords in the past. This could have contributed to the reluctance of some to give any quarter now he needs their help. You reap what you sow in business.”
The BBC’s Jack adds: “Almost all of the recent CVAs have been passed despite the gritted teeth of landlords. If this does turn out to be the moment they fight back in sufficient numbers, Sir Philip Green will know his high street luck has really run out.”
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Today's political cartoons - December 21, 2024
Cartoons Saturday's cartoons - losing it, pedal to the metal, and more
By The Week US Published
-
Three fun, festive activities to make the magic happen this Christmas Day
Inspire your children to help set the table, stage a pantomime and write thank-you letters this Christmas!
By The Week Junior Published
-
The best books of 2024 to give this Christmas
The Week Recommends From Percival Everett to Rachel Clarke these are the critics' favourite books from 2024
By The Week UK Published
-
Labour shortages: the ‘most urgent problem’ facing the UK economy right now
Speed Read Britain is currently in the grip of an ‘employment crisis’
By The Week Staff Published
-
Will the energy war hurt Europe more than Russia?
Speed Read European Commission proposes a total ban on Russian oil
By The Week Staff Published
-
Will Elon Musk manage to take over Twitter?
Speed Read The world’s richest man has launched a hostile takeover bid worth $43bn
By The Week Staff Last updated
-
Shoppers urged not to buy into dodgy Black Friday deals
Speed Read Consumer watchdog says better prices can be had on most of the so-called bargain offers
By The Week Staff Published
-
Ryanair: readying for departure from London
Speed Read Plans to delist Ryanair from the London Stock Exchange could spell ‘another blow’ to the ‘dwindling’ London market
By The Week Staff Published
-
Out of fashion: Asos ‘curse’ has struck again
Speed Read Share price tumbles following the departure of CEO Nick Beighton
By The Week Staff Published
-
Universal Music’s blockbuster listing: don’t stop me now…
Speed Read Investors are betting heavily that the ‘boom in music streaming’, which has transformed Universal’s fortunes, ‘still has a long way to go’
By The Week Staff Published
-
EasyJet/Wizz: battle for air supremacy
Speed Read ‘Wizz’s cheeky takeover bid will have come as a blow to the corporate ego’
By The Week Staff Published