Sir Philip Green is hoping that creditors will approve the rescue package for his ailing Arcadia empire in a second vote on Wednesday, even as the company’s biggest landlord, Intu, signalled that it would oppose the plan.
Arcadia has repeatedly warned that it is “highly likely” it will be forced to go into administration if all seven of its proposed company voluntary agreements are not approved, something that could happen as soon as Wednesday evening.
That would put up to 18,000 jobs at risk at the likes of Topshop, Dorothy Perkins, Miss Selfridge, and Burton.
Last week’s meeting with creditors was abruptly halted before votes were counted, when it became clear that the agreements did not receive the requisite 75% support.
As part of the agreements, which are designed to allow it to settle its debts by paying only a proportion of the amount owed to creditors, landlords are being asked to accept a series of rent cuts.
But Green was forced to improve his ask following last week’s vote: Certain landlords who had been asked to reduce their rents by 70% are now only been asked for a 50% discount.
And landlords who had been asked for 30% rent cuts are now being asked for 25% cuts.
That will cost the Green family an additional £10m a year, according to a “final” proposal that Arcadia sent to creditors on Friday.
Intu, which lets 35 stores to Arcadia, is widely reported to have decided to vote against the proposals.
Though it only has sway over 15% of the vote, its opposition may be enough to collapse the empire.
Predicting that creditors will reject the deal, retail analyst Chris Field said that the fate of Green’s empire was still “by no means certain.”
“Things never are as dire as the business owners like to say, and Sir Philip is no fool,” Field said in a note.
“I think they’ll reject Philip Green’s current rescue deal and there will be more discussions, but at some point, the landlords and shareholders are going to have to accept some kind of a deal,” he said.
In addition to the rent cuts, the rescue package would also see some 23 Arcadia stores in the UK and Ireland close, as well as all 11 Topshops in the US.
As part of a separate but related plan to put two of Arcadia’s property companies into administration, a further 25 stores are likely to close.
Similar company voluntary agreements have been used to stave off the collapse of other retailers, such as Debenhams and House of Fraser.