Arcadia board meets to discuss restructuring
today Apr 30, 2019
If we could be a fly on any wall, it would be the Arcadia boardroom on Tuesday with the board set to meet to talk about the future of the company’s various fashion chains in the UK and beyond, as well as the timing of its expected company voluntary arrangement (CVA).
The crunch talks come along with the expectations that the controversial CVA process will be used to help the firm accelerate its closure plan that has already been operating for the past few years.
The company has been exiting leases as they come to their end, but with Arcadia needing to quit some underperforming stores whose leases may still have some years to run, it needs to act now to stem mounting losses from such shops.
Arcadia boss Sir Philip Green has already appointed two restructuring experts to the board this month and has also reportedly struck a deal with lender HSBC to act as a guarantor for its suppliers. Jamie Drummond Smith, a restructuring expert, was named chairman and will lead the meeting on Tuesday.
The Topshop owner is believed to be planning to close 25 shops across its portfolio as a result of the CVA and wants to strike deals for lower rents on a large number of others. In return, newspapers have reported that he has offered landlords a stake in the company.
Interestingly, given the problems Green has faced in the past in his dealings with company pension funds (he had to top up the BHS fund to the tune of hundreds of millions of pounds), he also reportedly wants to cut the group's £50 million annual contribution to employee pension schemes in half. In return, the company is believed to be offering the Topshop flagship at Oxford Circus as security. The giant shop, occupies one of the prime positions on Oxford Street and is one of Europe’s busiest shopping street’s most valuable pieces of real estate.
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