Philip Green secures enough support to save Arcadia empire - for now
Sir Philip Green's Arcadia retail empire has scraped through plans to close stores after a knife-edge vote received the backing of landlords.
His restructuring plan means around 1,000 jobs are at risk as 23 stores close under the CVA, while another 25 will be shuttered as part of a wider restructuring.
Landlords will also receive smaller amounts of rent on certain properties, with some reduced to half the original price.
The meeting was convened to vote on seven separate company voluntary arrangement (CVA) proposals that would cut costs and keep creditors at bay.
There were warnings the future of the whole group - and 18,000 jobs in total - was reliant on the proposals gaining support.
Arcadia's brands include Topshop, Miss Selfridge, Burton, Dorothy Perkins, Evans and Wallis.
Joel Hills explains the impact of today's decision
Because of the way the group is structured, most of the extra money being pumped into the rescue plan comes through Sir Philip's wife, Lady Tina Green.
Arcadia said Lady Green, who is ultimate owner of the business, will invest £50 million into the company, on top of £50 million funding already provided in March.
But pensions contributions will fall from £50 million to £25 million a year for three years, with security of £210 million on Arcadia assets.
The first CVA meeting was adjourned after it became clear several landlords intended to oppose the plans, which include at least 23 store closures.
A further 25 Miss Selfridge and Evans stores have also been earmarked for closure as part of a restructuring process that is separate to the CVAs.
Sir Philip had offered a concession to landlords in a bid to sweeten the deal, proposing to impose less severe rent cuts than originally planned.
Under the initial proposals, shop owners were facing rent reductions of between 30% and 70%. This will now be reduced to a range of 25% to 50%.
Arcadia's chief executive Ian Grabiner said: "We are extremely grateful to our creditors for supporting these proposals and to Lady Green for her continued support.
"After many months of engaging with all our key stakeholders, taking on board their feedback, and sharing our turnaround plans, the future of Arcadia, our thousands of colleagues, and our extensive supplier base is now on a much firmer footing."
What do analysts make of the deal?
Responding to the decision, Melanie Leech, chief executive of the British Property Federation, said: "CVAs are never easy as property owners are being asked to absorb large losses, which impacts the investment that these owners manage, including many of our savings and pensions.
"However, ensuring a sustainable future for the UK retail sector is equally critical to both the property and retail sectors.
"Property owners will now want to see Arcadia's leadership committed to delivering its turnaround plan to restore the long-term health of the business."
Meanwhile, Chloe Collins, senior retail analyst at Global Data, said: "Although Arcadia's CVA has been approved, it is unsurprising that it faced backlash from some landlords who have doubts about the retailer's future.
"Its leading brands - Topshop and Topman - still have a strong following among millennials, however many of the others, such as Miss Selfridge and Dorothy Perkins, are now irrelevant in a highly saturated market and chances of revival are slim, leading landlords to question whether other retailers could offer their spaces more longevity."