Arcadia weighs sale or closure of international arm
Arcadia, the UK-based retail group owned by Philip Green, is looking at closing or divesting its largely loss-making international operations, The Sunday Times reported.
Arcadia’s landlords were last week sent proposals prior to a planned company voluntary arrangement (CVA) process and the paperwork revealed the disposal is under consideration, the report said.
The international arm operates 1,170 shops across 36 non-UK countries, although some are franchises or concessions in department stores, the report said.
The proposals also showed that Arcadia’s sales in the 12 months to August 2018 were 10.5% down at GBP 1.7bn (USD 2.2bn), while like-for-like revenues dropped 7.5%, the item reported.
In the event the CVA is approved, 57 of Arcadia’s shops will be closed down, the document said. Green is also hoping to cut rents at an additional 459 properties by around 30% on average, the item reported.
Some landlords are believed to have asked for a 30% Arcadia stake, while Green has offered them 10%, the report said. Green has promised to lend GBP 100m to the business, of which 50% is dependent on approval of the CVA. The CVA has yet to be approved by the landlords and by the Pensions Regulator, the report said, noting Arcadia’s estimated GBP 750m pension deficit.
Meanwhile, the report went on to note that Arcadia’s flagship Topshop building at Oxford Circus in London has a GBP 310m mortgage repayment due to Royal Bank of Scotland next month.