Arcadia CVA plan under fire before it's officially launched
A proposal to close 23 Arcadia stores and negotiate rent bills for a further 194 shops has been criticised by the Pensions Regulator.
The retail group behind Topshop, Dorothy Perkins and Burton revealed on Wednesday details of a company voluntary agreement (CVA) plan that could put 520 jobs at risk in the UK and Ireland.
In addition to store closures and rent renegotiations, the fashion empire proposes a £50 million injection from majority owner Philip Green, and has promised landlords a 20% share of the equity value of the business in the case of a sale.
But as part of the wider cost-cutting drive, the company wants to halve the £50 million annual payments to its pension scheme. And even though Green said he is prepared to put an additional £100 million into the scheme over the next three years, the Pensions Regulator said it was not enough.
“We do not consider the proposals are sufficient to ensure that members of the scheme are adequately protected,” it stated on Wednesday evening. The financial regulator’s support is key to get a CVA approved.
Arcadia’s pension scheme is running a deficit of £750 million, according to UK newspapers.
The CVA proposal will be voted on by creditors on 5 June, and can only be approved if at least 75% of the company’s creditors vote in favour.
Topman, Evans, Miss Selfridge and Wallis are also part of Arcadia’s fashion empire.
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