Sir Philip Green’s fashion empire hangs by a thread as CVA vote is delayed
SIR PHILIP Green made a dramatic last-minute bid to stall the collapse of his retail empire tonight after postponing a crunch vote that threatened the future of his high street brands.
In a shock move the Topshop tycoon decided to delay the final decision from creditors on whether to approve an insolvency process for his Arcadia fashion group, as landlords wavered in their support for a controversial turnaround plan.
Green and his Arcadia directors are now set for a frenzied week of desperate negotiations with landlords ahead of a second make-or-break meeting next Wednesday, when creditors will vote again on whether or not to approve a series of company voluntary arrangements (CVA), an insolvency process used to slash rents and close stores.
If the retail giant fails to secure support from 75 per cent of creditors, then it is expected to collapse into administration, putting 18,000 jobs at risk.
“We believe that with this adjournment, there is a reasonable prospect of reaching an agreement that the majority of landlords will support,” said Arcadia chief executive Ian Grabiner.
In a vote that looked set to come down to the wire, some of Britain’s largest landlords were split on whether to back the under-fire mogul’s restructuring plans.
Intu, Aviva and M&G were among the major creditors understood to have voted against some of the proposals, while British Land and Hammerson were said to have voted in favour of them.
“In the context of recent high profile retail CVAs, this is certainly a first,” said Simon Underwood, business recovery partner at accountancy firm, Menzies LLP.
He added: “This is not an outright no, and when creditors come back in a week time, there may be more agreement as to which modifications can be agreed, so there might still be chance of this going through.”
Green, who was not present at today’s meeting in Central London, suspended the vote count by an hour to plead with several major landlords.
After voting closed at 5pm, Arcadia released a surprise announcement saying it had decided to “adjourn today’s creditors’ meetings in order to conduct further dialogue with a few landlords, with a view to securing a final decision on the seven CVAs.”