A decision on the fate of Sir Philip Green’s Arcadia empire and the 18,000 people it employs has been delayed until 12 June to allow for further discussions with a few of the company’s landlords, the Topshop owner said on Wednesday.
Arcadia was hoping that its creditors would approve seven company voluntary arrangements at a Wednesday meeting, which would allow it to settle its debts by paying only a proportion of the amount it owes to them.
But it appeared that not all of the agreements had achieved the requisite 75% support, prompting Arcadia to adjourn the meeting for another week.
Arcadia CEO Ian Grabiner said that the company believed the adjournment could allow for “the reaching of an agreement that the majority of landlords will support.”
“We are pleased to have secured the support of the pension trustees, the Pensions Regulator and the Pension Protection Fund, as well as the full backing of our trade creditors and a significant number of landlords,” Arcadia said in a statement.
The company has warned that it is “highly likely” it will be forced to go into administration if the deals are not approved, putting the jobs of its 18,000 employees at risk.
Landlords at nearly 200 Arcadia stores in the UK and Ireland are being asked to cut their rents by between 30% and 70%, in return for a 20% stake in the group.
The fate of Topshop, as well as its Dorothy Perkins, Miss Selfridge, and Burton brands, thus hangs in the air.
Under the proposals outlined in the company voluntary agreements, 23 Arcadia stores in the UK and Ireland will close, something that could result in the loss of more than 500 jobs. All 11 Topshops in the US will be shut.
Another 25 stores are likely to close if the group goes ahead with putting two of its property companies into administration.
Arcadia reached a key deal with the Pensions Regulator on Tuesday after Green agreed to inject another £25m ($31.7m) into the company’s pension fund. This secured the backing of the government’s Pension Protection Fund, which is a big creditor in one of the agreements.
Under the deal struck between Arcadia and the Pensions Regulator, Green and his wife Lady Tina, who technically owns the group, have committed a total package worth £385m — comprised of cash and property assets — to the pension fund over the next three years.