Topshop future in limbo as crucial vote delayed

The future of fashion label Topshop is in limbo after a crucial vote on a Company Voluntary Arrangement for parent Arcadia Group was delayed last week.

Arcadia’s chairman Sir Philip Green is trying to gather approval from creditors for a scheme which would see them convert debt to future equity and rents reduced on UK stores in return for sa further investment by Green’s family of £50 million (US$63.8 million). The scheme would also see 23 stores shuttered in the UK and the closure or sale of all 11 of Topshop’s US stores – on top of 25 UK store closures already planned.

“Against a backdrop of challenging retail headwinds, changing consumer habits and ever-increasing online competition, we have seriously considered all possible strategic options to return the group to a stable financial platform,” Arcadia CEO Ian Grabiner said when unveiling the CVA last month.

“This has been a tough but necessary decision for the business.”

But a meeting of creditors – who include suppliers landlords and pension funds – was postponed last week when it became clear support would fall short of the 75 per cent required for it to be approved. That vote will now likely be held this week. However if it fails, creditors may call in administrators opening the possibility of a sale of Arcadia’s brands, which also include Miss Selfridge, Dorothy Perkins, Evans and Topman.

UK retail industry sources say landlords are especially cynical to the CVA, casting doubts on whether Green can revive the troubled business in an era of dwindling high-street retail sales and growing e-commerce.

One major retail landlord told The Business of Fashion that cutting rents to Arcadia to help its survival would be “quite a tough message to communicate to other tenants paying full rent”.


Arcadia’s like-for-like sales reportedly fell 7.5 per cent in the year to August 2018, with total sales down 10.5 per cent to £1.7 billion. That decline was largely due to a 20 per cent slump in Topshop sales.

The chances of Green’s plan did receive a boost last week after The Pensions Regulator and Pensions Protection Fund indicated their support. That followed a commitment by Sir Philip’s wife Lady Tina Green to invest a further £100 million in the fund to protect staff.

Lady Green has also promised landlords who accept the deal a 20 per cent share of the proceeds should Arcadia be sold.  

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