Arcadia pauses pension top-ups to conserve cash
Arcadia is to postpone payments to its pension scheme for at least three months during the coronavirus crisis.
Like many other companies, the group behind leading British fashion retail brands including Topshop and Dorothy Perkins is taking steps to preserve liquidity to ensure it can survive amid temporary store closures and uncertainty.
Arcadia’s pension trustees have agreed to the deferment, according to Sky News, but the decision is likely to cause concerns following a disagreement with the Pensions Regulator last year.
To get his company voluntary agreement (CVA) approved, Sir Philip Green agreed to inject an additional £25 million annually into the group’s pension scheme, equating to monthly payments of over £2 million.
These contributions will be halted for at least three months, or while the shutdown remains in place.
All non-essential businesses have been told to close their doors to prevent the spread of the coronavirus. The UK government said it will review the measures in mid April, but an extension is likely to happen, with England's deputy chief medical officer Dr Jenny Harries warning it could be six months before life in the UK returned to normal.
The Pensions Regulator is aware of Arcadia’s deferral plan, according to the newspaper.
Arcadia is one of the UK’s largest privately owned employers, with about 18,000 employees across its various clothing brands. The business was already struggling before the coronavirus outbreak. Last year, it closed dozens of stores and reduced rents at hundreds more. Like its rivals, the company has had to cope with a shift in consumer behaviour, growing business costs and consumer caution.
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