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Major Landlord Refusing to Back Arcadia Group’s CVA Rescue Plan

Written by: Keith Tully

Reviewed: Tuesday 11th June, 2019

Retail streetThe Arcadia Group, which owns numerous British retail businesses including Topshop and Topman, is facing the prospect of collapse after a key creditor said it would not back plans for a rescue deal.

Proposals for a Company Voluntary Arrangement (CVA) have been put forward by bosses of the Arcadia Group but will need at least 75 per cent support among its creditors.

A vote on those proposals is due to take place on Wednesday (June 12th) but one of the group’s main creditors, Intu Properties, has made clear that it will not be supporting the plans.

Intu, which owns some of the largest shopping centres in the country, including the Trafford Centre in Manchester and the Lakeside in Essex, has informed bosses at Arcadia that it will not be backing the CVA plans as they stand.

The consequences of the company’s position are yet to become clear but the prospect of Arcadia entering administration now looms large and casts considerable doubt over the future of the group’s roughly 18,000 employees.

The vote on the CVA plans had initially been scheduled for early June but was delayed after Intu said that it would not be backing those proposals.

Very sizable rent cuts of around 40 per cent are still included in the latest CVA deal and Intu has suggested that agreeing to those terms would be to the disadvantage of other retail tenants operating out of its shopping centres.

If Arcadia sees its proposals rejected by creditors then it could become the latest high-profile retail operator to enter administration, following the likes of Debenhams, House of Fraser, Toys ‘R’ Us and Maplin in recent years.

The Arcadia Group’s best-known businesses are Topshop and Topman but it also owns and operates the clothing retailers Dorothy Perkins, Burton, Evans, Wallis and Miss Selfridge.

Arcadia owned the department store chain BHS between 2009 and 2015, until it was sold for just £1 before eventually heading into administration in April 2016.

Buyers were sought for BHS after it entered administration but a few months later it was decided that the retailer would be wound down, which subsequently resulted in the loss of nearly 11,000 jobs.

Keith Tully

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Keith Tully
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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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