Landlords back Arcadia rescue plan but chair suggests there are many store closures to come

Philip Green has been battling to save his retail empire. Credit: PA

Arcadia lives to fight another day, the group has been saved from administration.

A company source said the vote by landlords “was extremely close”, but in the end, the rebellion blew out and a sufficient number backed Sir Philip’s Company Voluntary Arrangement (CVA) rescue plan.

Arcadia needed 75% of creditors to support the CVA proposals, the company hasn’t yet said what percentage did.

Arcadia’s plan to cut costs involves the closure of 48 stores with the loss of 1,000 jobs.

There will be rent reductions of up to 50% at a further 200 Arcadia stores

Speaking on Wednesday night, Sir Philip told me: “Suppliers have been amazing, they trust us, they’ve continued to deliver to us, it’s been business as usual.

"I’m very, very appreciative of all the support we had.

"All seven CVA’s passed.

"We can now get this business back in great shape."

  • ITV News Business Editor Joel Hills explains that landlords have voted to back Sir Philip's rescue plan, which means around 1,000 jobs will go, but that more roles could go in the future

Sir Philip wasn’t at the creditors' meeting in central London, neither was he willing to comment on remarks made at the meeting by a member of the Arcadia board.

Jamie Drummond-Smith, chair of Arcadia Group, told landlords that Arcadia only needed 300 to 350 UK shops to execute the turnaround plan.

If that is the case then there are at least 150 store closures to come.

The CVA proposal suggests that 265 stores have leases of less than one year remaining.

“You’re going down the wrong path,” Sir Philip told me when I asked him about Mr Drummond-Smith’s comments.

“We got the ball in the net, we won 7-0, that’s the focus, being positive about what was achieved today, it’s not about some catastrophe.

"Let’s get on with the job of rebuilding the business."

On Wednesday, Arcadia cleared an important hurdle but the business still has issues.

Sales are falling, landlords feel significant investment is critical to revive a series of retail brands that have lost their sparkle.

It’s worth remembering that 70% of companies that go through CVA restructuring end up on their knees again months later.