Topshop owner Sir Philip Green is planning to close 23 of his retail empire's stores across the UK and Ireland, as well as all 11 of the Topshop and Topman stores in the US as part of a CVA proposal.
Arcadia, which owns Topshop, Dorothy Perkins, Miss Selfridge, Wallis, Evans and Burton, is also asking for rent cuts at 194 of its 566 UK and Irish stores. Arcadia said all its stores in the UK and Ireland will continue to trade normally until a decision is made on the CVA proposals in June.
As part of the proposal, Arcadia said it would halve its annual contributions to its pension scheme from 50 million pounds to 25 million pounds. Additionally, Lady Tina Green, Sir Philip’s wife and a major shareholder, will invest 50 million pounds of equity into the group, in addition to the 50 million pounds of funding which was provided in March. She has also agreed to provide all affected landlords with an entitlement to a pro-rata share of 20 percent of any equity value in the group if the company is eventually sold as part of the CVA.
Arcadia will hold a meeting with creditors on 5 June to seek approval for the proposals - 75 percent approval must be given for the CVA to go ahead.
Arcadia looking to close 23 stores in UK and Ireland as part of proposed CVA
“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," said Arcadia chief executive Ian Grabiner in a statement. "Following constructive discussions with all key stakeholders, we believe that a CVA is the best course of action to reduce our fixed cost base and ensure we can continue meeting our commitments to pension trustees, staff, creditors and our extensive supply chain for the long term, while continuing to serve customers through our portfolio of quality fashion brands.”
Richard Lim, chief executive at Retail Economics, added: “The unrelenting shift towards online, fiercer competition and heightened customer expectations have forced yet another retailer into taking drastic action to try to save the business. These changes are happening at an unprecedented pace and proving too fast for many retailers to cope.
"Arcadia has failed to shift fast enough to a more experience and digitally-led business model, burdened with too many stores, too much space and inflexible lease structures while the impact of rising operating costs has decimated profits.
“But it’s not just fewer stores that are needed to ensure Arcadia’s long term survival. It ultimately needs a leaner business model, including less staff and fewer brands, as well as investment into its identity and customer experience to fend off online and value retailers.”
Here is the full list of stores planned to close:
- Aberdeen, Dorothy Perkins, Burton
- Ashton under Lyne, Topshop, Topman
- Bedford, Topshop, Topman
- Bluewater, Miss Selfridge
- Cheshunt, Outfit
- Cork, Dorothy Perkins, Evans
- Dublin, Evans, Wallis
- Dublin,Topshop, Miss Selfridge
- Dublin, Topshop, Topman
- Dublin, Wallis
- Fareham, Topshop, Topman
- Galway, Miss Selfridge
- Glasgow, Burton, Topman
- Luton, Topshop, Topman
- Newcastle upon Tyne, Outfit
- Nuneaton, Topshop, Topman
- Reading, Dorothy Perkins, Burton
- Salisbury, Topshop, Topman
- Southend, Miss Selfridge
- Stirling, Dorothy Perkins, Burton
- Swindon, Dorothy Perkins, Burton
- Swindon, Miss Selfridge, Wallis, Evans
- York, Dorothy Perkins, Burton
Photo credit: FashionUnited