The CVA is said to be vital to Arcadia’s restructuring and approval would allow the company to shut at least 23 stores in the UK as well as significantly reduce the rent on existing properties. In return landlords would receive a 20% stake in the company.
A group of landlords rejected Arcadia’s proposals, which involved rent cuts of up to 70% on 194 shops, deeming it “too extreme”, and could have a knock-on effect for other retailers.
Arcadia, which employs over 18,000 people, requires at least 75% approval from its landlords across the UK to implement the seven CVAs. Arcadia and Deloitte now plan to meet key landlords who did not back the deal.
The latest setback comes just 24 hours after owner Philip Green, reached an agreement with the UK Pensions Regulator to supply an extra £75m over three years to the Arcadia’s pension fund.
Ian Grabiner, CEO of Arcadia, said: “It is in the interests of all stakeholders that we adjourn today’s meetings to continue our discussions with landlords. We believe that with this adjournment, there is a reasonable prospect of reaching an agreement that the majority of landlords will support.”