Retail group Arcadia, has announced that all seven of its company voluntary arrangements (CVAs) have today been approved by the required majority of the companies’ creditors, including its pension trustees, suppliers and landlords.
The approval allows the retailer to restructure, closing around 23 stores, in a bid to prevent going into administration.
The group has reached an agreement with the trustees of the pension schemes, the Pensions Regulator and the Pension Protection Fund, by which Arcadia Group will reduce its deficit repair contributions from £50m to £25m per year, for three years, with security granted to the value of £210m over certain assets of the group, to further support the schemes.
Ian Grabiner, CEO of Arcadia Group, said: “We are extremely grateful to our creditors for supporting these proposals and to Lady Green for her continued support. After many months of engaging with all our key stakeholders, taking on board their feedback, and sharing our turnaround plans, the future of Arcadia, our thousands of colleagues, and our extensive supplier base is now on a much firmer footing.
“From today, with the right structure in place to reduce our cost base and create a stable financial platform for the Group, we can execute our business turnaround plan to drive growth through our digital and wholesale channels, while ensuring our store portfolio remains at the heart of our customer offer.
“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.
“Finally, I would like to thank all of our team and advisors for their support throughout the CVA process. It has been incredibly challenging for all concerned but I believe this is the right outcome for all our creditors.”
The result follows a tumultuous year for the one of Britain’s biggest retail companies, having faced problems both inside and outside of the boardroom.
In October, owner Philip Green was named in the #metoo allegations by Lord Peter Hain, after an injunction was taken out against The Telegraph, who accused a business leader of bullying, racially abusing and sexually harassing staff.
Earlier this year, popstar Beyonce removed her Ivy Park brand from all Arcadia stores, after the allegations made against Green.
Leaked emails in January also indicated that owner Philip Green had asked bank HSBC to find the company a buyer.
More allegations surfaced against Green in May, as he was charged with four counts of misdemeanour assault in the US, in relation to inappropriate touching of fitness instructor in Arizona. Green strenuously denies all allegations of inappropriate conduct made against him in the last year.
Arcadia also pledged to pay an extra £75m to its pension fund over the next three years, after striking a deal with the pensions regulator.
The company has also struggled to agree company voluntary arrangements (CVA’s) with its landlords in order for their restructure to take place, which would see more than 23 stores in the UK close. This is in a bid to prevent the retailer from going into administration.