Arcadia Group has adjourned its company voluntary arrangement meeting with creditors to “conduct further dialogue with a few landlords”.
The group’s creditors voted on seven CVAs at County Hall in central London earlier today (5 June). It is understood that not all of the CVAs met the minimum 75% threshold required to pass a vote.
The meetings have now been adjourned to 12 June. Arcadia’s management believes it can secure enough support for its proposals in the meantime.
Ian Grabiner, chief executive of Arcadia, said: “It is in the interests of all stakeholders that we adjourn today’s meetings to continue our discussions with landlords.
“We believe that with this adjournment, there is a reasonable prospect of reaching an agreement that the majority of landlords will support.”
It is understood that intu voted against the proposals, while British Land and Hammerson are among the landlords that backed the CVAs.
Ed Cooke, chief executive of retail property organisation Revo, said: “I’m not surprised some property owners are aggrieved about the Arcadia CVA. The process is iniquitous for property owners, in terms of how their credit is calculated, and also disadvantages those retail businesses which are trading successfully, investing and adapting to the structural change in retail.
“Like BHS, Arcadia has, fundamentally, not invested to keep up, which is why we are at this point. However, for all retail the far bigger issue is business rates which are making shops, once the lifeblood of our communities, unviable. Unless the government commits to reform, including exploring an online sales tax, we will continue reading about business failures on the high street.”
EG previously found that intu, British Land and Arcadia’s property-owning arm, Redcastle, owned the largest proportion of stores in Sir Philip Green’s retail empire, meaning that they had the most exposure to a potential store restructuring.
Intu owns interests in 35 Arcadia-let stores across retail parks and shopping centres, including those held in joint ventures. British Land owns 24, while Hammerson and M&G each own 18 shops, including joint ventures held with other retail landlords.
Landsec has 13 stores, while divisions within the Legal & General Group – namely, L&G Investment Management and L&G Capital Investments – collectively own nine stores.
Of Arcadia’s 566 stores across the UK and Ireland, 23 have been identified for immediate closure under the proposals.
A further 194 locations will be subject to rent cuts of up to 70% and revised lease terms.
In the event of a future sale of the group, Lady Green, the main shareholder, has vowed to provide all affected landlords with an entitlement to a pro rata share of 20% of any equity value in the business.
Landlords will additionally be able to claim against a £40m compromised-creditor fund, and will not suffer any compromise of dilapidations on stores that are presently occupied.
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