The future of Sir Philip Green’s high street retail empire hangs in the balance ahead of crucial votes on a rescue deal.
Arcadia Group – the company behind the Topshop, Dorothy Perkins and Burton brands – needs the support of at least 75% of creditors in a series of ballots that were delayed last week because of significant opposition from landlords.
The company could collapse as early as this evening if its plans for 50 store closures and rent cuts elsewhere are rejected.
After suspending last week’s vote, Arcadia said it would reduce the severity of its proposed rent reductions in a bid to win enough support.
But Sky News revealed on Tuesday how Intu Properties – Arcadia’s second-biggest landlord – planned to maintain its opposition to the so-called company voluntary arrangements (CVAs) despite the sweetened offer.
Sky’s City editor Mark Kleinman reported that Intu’s voting rights were so great that every other major Arcadia landlord had to back the CVAs if they were to be carried.
Intu owns eight of the country’s top shopping centres including Manchester’s Trafford Centre and Lakeside in Essex.
Kleinman said that Landsec, British Land and Hammerson were understood to be supportive but the positions of several other creditors remained unclear.
Arcadia confirmed on Tuesday night that The Pensions Regulator (TPR) and the Pension Protection Fund (PPF) had approved the CVA amendments.
A collapse of Arcadia would represent the worst retail failure since the start of the high street crisis last year that saw chains battle a surge in costs from business rates to wage bills at a time of cautious spending by consumers.
It has seen the likes of Toys R Us, House of Fraser and Debenhams collapse – with the department store chains later rising from the ashes in leaner forms under new owners.
If Arcadia was to fall into administration, 18,000 jobs would be under threat.
More than 9,500 pension scheme members are also likely to require the support of the PPF, which finally agreed last week to back Sir Philip’s rescue plan after he pledged another £25m to its retirement scheme.
It would also mark a new chapter of despair for the tycoon who has been battling a series of challenges to his reputation since the collapse of BHS in April 2016 – a year after he sold the chain for £1.
Following a political storm, he agreed to pay up to £363m to compensate BHS pensioners.
Sir Philip has more recently faced questions over his behaviour towards Arcadia employees and his use of non-disclosure agreements to prevent former workers discussing their severance packages.
Last month, he was charged in Arizona in relation to his behaviour towards a Pilates instructor, although he has denied any unlawful wrongdoing.