Sir Phillip Green Stops Topshop Falling
Sir Philip Green's Topshop to Burton retail empire has staved off collapse after winning the backing of creditors for a rescue plan that involves the closure of 50 stores and 1,000 job losses.
Landlords of Arcadia Group’s 570 UK standalone stores, which are also home to Dorothy Perkins, Topman, Wallis, Evans, Outfit and Miss Selfridge, approved the plan on Wednesday, averting a slump into administration that would have put a further 17,000 jobs at risk.
Ian Grabiner, chief executive of Arcadia Group, 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.
“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."
The complex deal required 75% of all creditors and at least half of landlords to vote in favour of seven company voluntary arrangements (CVAs), which are insolvency procedures that have been used by a string of high street names to shut stores, including New Look and Mothercare.
Green sought to win over landlords with an initial promise to give them a 20% stake in the business and invest an extra £50m in the stores as part of a £135m turnaround plan intended to help Arcadia compete with rivals such as Asos, Zara and H&M.
After years of underinvestment, Arcadia’s sales slid by 5% in the 12 weeks to 10 March, according to market analysts Kantar. The overall clothing market increased sales by 1.4% over that period.
Analysts say the group’s sales started falling in the summer of 2015, since when its market share has slid by 1 percentage point to 3.2%. This may not seem a big change, but it reflects millions of pounds in lost turnover. One analyst said: “[Arcadia] is still miles behind the curve. It’s a pretty ugly picture.” Retail and property insiders describe many Arcadia stores as unexciting or shabby.