Shopping centres owner intu will vote against a revised survival plan for Sir Philip Green’s Arcadia fashion empire, according to some newspaper reports today.
Landlord Intu, which leases 35 stores to Green’s brands including Dorothy Perkins and Topshop, will not back a restructuring at the vital meeting tomorrow.
It is understood that the shopping centre company believes it unfair to its other retail tenants and not in the interest of shareholders.
Intu revealed that footfall was up 1.1% across its malls last month, and it would appear that it does not want to give in-demand store space away at a discount. Its figures are in sharp contrast with data from Springboard, which showed footfall across the country was down by 3.5% in May.
Arcadia wants to shut 23 shops and cut rents at 194 of its remaining 543 sites. The original plans were rejected by some landlords last week at the first CVA hearing.
The retailer, which employs about 18000 people, has since put forward less aggressive terms on rental cuts but approval is needed to stave off administration.
The meeting is still planned for tomorrow and Arcadia is continuing to talk with landlords, which have fought back against Sir Philip Green’s improved company voluntary agreement proposals with calls for the retail tycoon to sever his remaining directorships.
RPA Perspective Each CVA has been met by an increasingly exasperated group of landlords and they have largely passed because – despite attacking them as a collective – many landlords have eventually looked at the impact on their own estates when approving.
But the simple fact is that CVAs are not proving to be a saviour of ailing businesses but have rather put off the inevitable.
There is no doubt that there will be a seismic shock if the Arcadia CVA is blocked but perhaps enough really is enough. Add to that the fact the Green’s own brand is increasingly toxic and it may simply be that the viable parts of Arcadia are better sold off to operations who can take them on without the baggage of the past.
According to the Telegraph, a number of property firms could refuse Arcadia’s proposals for huge cuts in rent for its stores and store closures, regardless of the lower cuts to rent now being offered.
One landlord told the Telegraph they may derail the plan no matter what concessions are included.
Another said there is an idea among the hardliners to suggest that Green ends his remaining directorships in return for their backing and steps back from any involvement in the running of the business.
Landlords are also said to be concerned over the precedent agreeing to Arcadia’s CVAs may set for other big names on the high street to do the same.
A decision on the CVAs was expected last week, but on Wednesday Arcadia revealed that the final decision on securing the agreements was adjourned until tomorrow.
On Thursday last week, Arcadia announced it had revised its rent reductions.
It would now be looking to agree on rent reductions of between 25% to 50%, compared to the previous proposals of between a 30% and 70% decrease in rent across 194 of its stores.
Arcadia said landlords who have already voted to approve the CVAs “will also benefit from these improved terms”.
Group shareholder Lady Tina Green will fund the amendment, which in its first year is expected to cost around £9.5 million.
