It’s been confirmed that Bedford’s Topshop and Topman store will close as landlords agree to the Company Voluntary Arrangement (CVA) proposals set out by Sir Philip Green’s Arcadia Group.
A spokesperson for Arcadia said that they didn’t know when the Bedford store, and 22 others, would finally shut their doors but it won’t be for at least four months.
That’s due to landlords having 28 days to appeal and then after that period the stores must continue trading for at least 90 days by law.
In the meantime staff will be offered positions at other stores where possible.
A statement from Ian Grabiner, CEO of Arcadia Group, failed to acknowledge the stores due for closing, instead commenting: “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.”
The CVA has been designed to save the Arcadia group as a whole and does mean the 1,800 jobs across the business that could have been lost will now be saved.
That will be small comfort to the 520 who are going under the CVA plans and a further 25 stores and 500 jobs may also be axed once the CVA is complete.
What does the CVA mean?
As described in the Company Voluntary Arrangement (CVA) the Group’s majority shareholder, Lady Green, will invest £50m of equity into the Group, in addition to the £50m of funding already provided in March.
Lady Green has also agreed to fund the cost of the amended rental reduction terms within the CVA proposals, as announced on 7 June.
Separately, the Group has reached an agreement with the Trustees of the pension schemes, the Pensions Regulator and the Pension Protection Fund, by which Arcadia Group will reduce its deficit repair contributions from £50m to £25m per year, for three years, with security granted to the value of £210m over certain assets of the Group, to further support the schemes.
As previously announced, Lady Green will provide an additional £100m of cash into the schemes to help bridge the shortfall, with funding of £25m per year for the next three years plus an additional £25m contribution.
The CVA deal to reduce the overall spending of the Arcadia Group also included the closure of 23 stores and cutting 520 jobs.
Too little too late?
Some analysts are already commenting that this CVA may be too little too late. Speaking to the BBC, Chloe Collins, senior retail analyst at GlobalData said the investment is “too thinly spread.”
She added: “The agreed closures still leave Arcadia with an estate of around 500 stores which have been neglected for far too long and are now unable to match competition which moves in favour of experience-led shopping.”