SIR Philip Green’s high street empire, including Topshop, is to be saved from the brink of collapse after his wife agreed to bail him out of financial woes.
Today, stakeholders agreed to plans put forward by Arcadia Group that sees the group’s majority shareholder, Tina Green, pump another £50million into the business.
2 The future of Topshop stores will be decided at a crunch meeting todayCredit: Alamy Live News
The sum is on top of the £50million she already agreed to invest in the group, which owns Burton, Dorothy Perkins, Evans, Miss Selfridge, Topshop, and Wallis, in March this year.
Seven separate Company Voluntary Agreements (CVA) have been agreed which means the group, which currently employs 18,000 staff, won’t fall into administration today.
This many CVAs are needed due to the complex structure of the business.
But 23 proposed store closures, which had already been announced, will go ahead in three month’s time, axing 520 jobs.
It is understood that the plans have been agreed to by creditors, including pension trustees, suppliers and landlords.
The first CVA meeting was originally pushed back after it became clear several landlords intended to vote against the plans.
However, it seems they’ve since come around to the rescue bid.
A further 25 Miss Selfridge and Evans stores had already been earmarked for closure as part of a restructuring process that is separate to the CVAs.
Ian Grabiner, chief executive of Arcadia Group, says that the outcome of today’s vote has put the firm on “much firmer footing”.
He added: “I am confident about the future of Arcadia and our ability to provide our customers with the very best multi-channel experience, deliver the fashion trends that they demand, and ultimately inspire a renewed loyalty to our brands that will support the long-term growth of our business.”
Earlier today, Chris Field, independent retail analyst and chairman of Retail Connections, told The Sun he thought the rescue plan would be rejected.
He said: “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.
“The UK retail environment is still a difficult one and, inevitably, there will be some casualties as the High Street reinvents itself.
“While the deal remains on a knife edge – and I do foresee the investors turning the knife on the deal – the outcome of Sir Philip’s retail empire is by no means certain.”
‘There’s no tears for Philip Green’
Speaking to the Press Association, one landlord said the Arcadia CVA plans are different to previous ones from House of Fraser and Debenhams because the smaller units would be easier to fill with new occupiers.
“There was some sympathy for Debenhams,” he said. “Whereas here you’ve got a bigger pool of potential tenants. You’ve got more options so it’s easier to vote against it.
“Not that many people are that emotional about it. There’s no tears for Philip Green.”
It is understood that shopping centre owner Intu had planned to vote against the rescue plans.
Without the backing of the property giant, which owns the Trafford Centre in Manchester and the Lakeside in Essex, the vote was set to be a close one for Arcadia.
2 Philip Green needs to win the support for his survival plans from shop ownersCredit: PA:Press Association
In the Commons on Tuesday, business minister Kelly Tolhurst, answering a question from Labour’s Jenny Chapman, said: “We stand ready to do what we can along with my colleagues in MHCLG (Ministry of Housing, Communities and Local Government) if closures occur.
“We are working with the Retail Sector Council and we’re committed to making sure we are working with the retail sector and high streets to make sure we can really truly grow our high streets and protect retail for the future.”
Retail tycoon Sir Green is estimated to have lost his billionaire status with his fortune believed to have halved in a year amid a series of explosive scandals.
The Sunday Times Rich List has his fortune free-falling £1.05billion in a year to £950million because of a pension black hole in his “crumbling” Arcadia empire.
But the plummet still places Sir Philip and wife Tina at 156th on the list, down from joint 66th some 12 months earlier.
The Arcadia Group was valued as worthless in this year’s list, as the company copes with a pension debt which hit £565million.
The couple’s stake in the company was last year valued at £750million, while the compilers also removed £300million from their worth to allow the shoring up of the shortfall.
With his wealth peaking at almost £5billion in 2007, it is the first time in 17 years that Sir Philip has not been listed as a billionaire.
The devaluation comes after sustained criticism against Sir Philip and calls for him to lose his knighthood.
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He was lambasted over the collapse of BHS, affecting 11,000 jobs, 19,000 pension holders and leaving a £571million hole in the pension scheme.
The businessman, who sold the department store chain to Dominic Chappell for £1 before it plunged into administration, agreed to pay £363million towards the deficit.
Sir Philip has also faced a slew of allegations, including groping a female executive and making a racial slur at an employee.
The Croydon-born entrepreneur denied his behaviour was criminal or amounted to gross misconduct.
The Sun contacted Arcadia Group for a comment.
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