Arcadia confronts unhappy creditors in a battle to break bankruptcy | Business

The retail empire of Sir Philip Green is facing a difficult meeting with creditors this week to avoid a collapse of the administration that could endanger 18,000 jobs.

The group, which operates 570 stores, must obtain the approval of 75% of its creditors, most of whom are owners, for a restructuring that will allow it to close at least 23 stores and reduce rents by nearly 70. % of nearly 200 others.

Twenty-five other stores in the UK will close, Arcadia entrusting the administration of the Miss Selfridge and Evans portfolio companies. It also closes 11 Topshop stores in the United States.

The agreement, which will be voted on Wednesday, is also based on the conclusion of an agreement with the pension regulator on the financing of the pension deficit of Arcadia, worth up to 750 million pounds .

The regulator, which has legal powers to force Arcadia and Green to ensure that his pension is properly funded, wants to have an additional £ 50 million in addition to the £ 360 million over three years.

The future of Arcadia will be decided as Green faces a new personal battle, after being charged with four counts of badault for misdemeanors in the United States, after a pilates instructor claimed to have touched her. several times inappropriately, according to the Arizona authorities.

Pima County Deputy Attorney Lauren Deakin said that Arcadia's leader was formally charged with four counts of "knowingly touching another person with intent to injure, insult or provoke". ". Green denies the claims.

Each charge is punishable by up to 30 days in the Pima County Jail, a fine of up to $ 500 and a probationary term of up to $ 30. 39 to one year.

Green, who is no longer in the UK since October, is scheduled to appear in the Tucson court on June 19, according to information gathered by the court.

In an effort to rebadure Arcadia employees about their future, Executive Director Ian Grabiner informed employees in an email read by Observer The management team had a "clear plan in place" to cope with the increased competition from its mainstream and online rivals, supported by an investment of 135 million pounds sterling.

That includes £ 75 million on a new hi-tech distribution center in Daventry and an increase in wholesale sales, including bringing Topshop to the Asos online retailer's online platform. The company is also committed to pay £ 60 million to improve its online operations.

Sofie Willmott, Senior Analyst at GlobalData, said that investing online was absolutely necessary to allow Topshop to keep pace with the latest research tools and delivery options already offered by many peers. "It will be even more important now that brand websites resist the best-selling proposal from Asos," she said.

In the email, Grabiner said, "I am confident that we can succeed in securing the future of the company, but that depends on the support of our owners, pension administrators, retreats and [Pensions Regulator]. "

The restructuring proposal for Arcadia, an insolvency proceeding known as the "Voluntary Enterprise Arrangement" (CVA), exposes the disastrous state of Arcadia. The group realized nearly £ 220 million of underlying earnings three years ago.

In the paper, Arcadia says it can no longer pay its annual rent bill of £ 170 million for its rented stores. Despite budget cuts of £ 70 million over the last two years, he said he was unable to resolve his "significant financial difficulties".

Arcadia said that it was "very likely, immediately or after a short time, to proceed with an insolvent administration or liquidation," according to Arcadia.

More than one landlord told the Observer they had not yet decided if they would support the CVA.

Green has promised the owners a 20% stake in the company and a £ 40 million compensation fund to guarantee their support.

He also pledged £ 50 million in cash to modernize Arcadia's stores and online sales infrastructure, which underpins the group's turnaround plan to £ 135 million.