Arcadia earmarks stores for closure as it streamlines portfolio
today Mar 28, 2019
Arcadia is set to embark on a store closure plan that could see more than 67 stores of varying sizes in the UK and Ireland shut down in a bid to make the store estate more efficient.
Arcadia, whose brands include Topshop, Miss Selfridge, Dorothy Perkins and Burton, has drawn up a list of stores it no longer wants to operate. The list, seen by the Financial Times, includes units in some of the UK’s top shopping centres including Meadowhall in Sheffield, Merry Hill in the West Midlands and Metrocentre in Gateshead, as well as high streets.
Occupied by brands from across Arcadia’s portfolio, the stores cost the British retail group about £11 million in annual rent, FT said.
Philip Green’s business is understood to be considering launching a company voluntary agreement (CVA), a form of insolvency, to renegotiate rents and close stores. The company is currently working with advisers to sound out potential occupiers to take over the stores before starting more formal negotiations with landlords.
Sources familiar with the case have previously said Arcadia thinks its stores are paying about 25% too much rent. More than 200 stores will see their lease end over the next two years, which will allow it to renegotiate rents.
The list of 67 stores may not include all shops earmarked for closure, reports have suggested.
Arcadia’s brands have been hit by weakening consumer spending and fierce discounting by rivals. Its brands are also among the biggest concessionaries at Debenhams, which fell into administration last year before being acquired by Sports Direct.
A company voluntary agreement would have to be approved by Arcadia’s creditors, including landlords and the Pension Protection Fund.
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