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18,000 workers threatened with redundancy as Arcadia delays restructuring

Topshop


18,000 Arcadia group workers could be facing redundancy as Sir Philip Green’s firm delayed a crunch vote on restructuring plans for a week.

The company said on Wednesday that it would adjourn a meeting of suppliers, landlords and other creditors voting on seven company voluntary arrangements (CVAs) until June 12.

It said this would give it more time to discuss the plans with landlords, amid reports that several shop-owners like Trafford Centre owner Intu were not happy with the arrangements.

Ian Grabiner, CEO of Arcadia, said: ‘It is in the interests of all stakeholders that we adjourn today’s meetings to continue our discussions with landlords.

‘We believe that with this adjournment, there is a reasonable prospect of reaching an agreement that the majority of landlords will support.’

It emerged last month that some shop-owners were demanding further cash investment in the business in exchange for their backing.

The delay leaves the firm’s future hanging in the balance, after it told landlords that it risked administration without the restructuring.

The group, which has a £750 million pension deficit, employs about 18,000 staff, all of whom could face redundancy if it collapses, and is behind brands including Topshop, Burton, Dorothy Perkins and Miss Selfridge. It has come under pressure in recent years from other fast-fashion brands as more shoppers move online.

The proposals, which were launched last month, involve the closure of 23 stores in the UK and Ireland.

Another 11 Topshop and Topman stores in the U.S. were earmarked for closure, while an additional 25 Miss Selfridge and Evans stores were also slated to be axed.

The initial plans also included a reduction in the company’s contributions to its pension fund, alongside a fresh injection of cash into the scheme.

However Arcadia agreed with the pensions watchdog on Tuesday that Sir Philip would contribute another £25million, bringing the total cash and security package to the value of £310million.

Speculation began early this year that Sir Philip would look to either sell off the company or close stores.

In March, Arcadia confirmed it was exploring options to improve efficiency in the business.

Later that month, it hired property advisers to assess its estate while drawing up restructuring plans.

In April, U.S. investor Leonard Green & Partners sold its 25 per cent stake in Topshop and Topman back to the parent company, in a move which Arcadia said simplified its structure and would allow the board to focus on restructuring.



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