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Philip Green's Arcadia group on a knife-edge as creditors vote on rescue plan - business live Philip Green's Arcadia group on a knife-edge as creditors vote on rescue plan - business live
(32 minutes later)
A small crowd of reporters has gathered outside Etc Venues on Aldersgate, near St Paul’s in central London.
Inside, Arcadia’s creditors will soon start voting on whether to accept the CVA agreement, having rejected it a week ago.
Tv cameras here again for Arcadia CVA meeting in rather unglamorous spot on a roundabout.. appropriate as we’ve been down this route before? pic.twitter.com/96QWLHrHTo
The Queen’s property empire, the Crown Estate, has decided to support Arcadia’s restructuring, my colleague Sarah Butler hears.The Queen’s property empire, the Crown Estate, has decided to support Arcadia’s restructuring, my colleague Sarah Butler hears.
That’s a boost for Philip Green. Last weekend, the Estate was locked in talks with Arcadia over today’s CVA votes.That’s a boost for Philip Green. Last weekend, the Estate was locked in talks with Arcadia over today’s CVA votes.
I understand the Crown Estate has voted to back Arcadia’s cva but will be ‘actively managing’ its portfolio afterwards.. #arcadiacvaI understand the Crown Estate has voted to back Arcadia’s cva but will be ‘actively managing’ its portfolio afterwards.. #arcadiacva
David Parsley of Retail Week agrees that Land Securities holds the key to Arcadia’s rescue deal. David Parsley of Property Week agrees that Land Securities holds the key to Arcadia’s rescue deal.
ARCADIA UPDATE: Here we go again. Arcadia creditors' will meet at midday today to decide the fate of 18,000 workers and some of the high street's most famous brands. Like last week, Rob Noel, CEO of Landsec, has what appears to be the casting vote. It all feels oddly familiar. pic.twitter.com/FdLjmhUeZYARCADIA UPDATE: Here we go again. Arcadia creditors' will meet at midday today to decide the fate of 18,000 workers and some of the high street's most famous brands. Like last week, Rob Noel, CEO of Landsec, has what appears to be the casting vote. It all feels oddly familiar. pic.twitter.com/FdLjmhUeZY
Understand Arcadia feeling "more positive than they did last week" about CVA passing, as you'd expect after additional talks/concessions. But this will go right to the wire...Understand Arcadia feeling "more positive than they did last week" about CVA passing, as you'd expect after additional talks/concessions. But this will go right to the wire...
Retail Week’s Luke Tugby has heard that the vote, due sometime afternoon, could be extremely close....Retail Week’s Luke Tugby has heard that the vote, due sometime afternoon, could be extremely close....
Calls still being made this morning to creditors with "very, very small" votes to ensure their support. Arcadia acutely aware that every vote counts at this stageCalls still being made this morning to creditors with "very, very small" votes to ensure their support. Arcadia acutely aware that every vote counts at this stage
Sources suggesting that the CVA will squeeze through, but vote share in favour could be as little as 75.5%. It's that tightSources suggesting that the CVA will squeeze through, but vote share in favour could be as little as 75.5%. It's that tight
Correction: Land Securities owns 12 Arcadia stores, not 24 as I mis-wrote earlier.Correction: Land Securities owns 12 Arcadia stores, not 24 as I mis-wrote earlier.
Even so, their vote at today’s CVA will be crucial to the group’s future, and the jobs of thousands of employees.Even so, their vote at today’s CVA will be crucial to the group’s future, and the jobs of thousands of employees.
Here’s the Press Association’s latest Arcadia story, for those looking to get up to speed before today’s CVA vote:Here’s the Press Association’s latest Arcadia story, for those looking to get up to speed before today’s CVA vote:
Sir Philip Green’s retail empire faces a make-or-break vote on its future on Wednesday as it seeks approval for its restructuring plans, deciding the fate of 18,000 employees.Sir Philip Green’s retail empire faces a make-or-break vote on its future on Wednesday as it seeks approval for its restructuring plans, deciding the fate of 18,000 employees.
Arcadia, the company behind Topshop, Wallis, Burton and a raft of other brands, will reconvene a meeting to vote on seven separate company voluntary arrangement (CVA) proposals.Arcadia, the company behind Topshop, Wallis, Burton and a raft of other brands, will reconvene a meeting to vote on seven separate company voluntary arrangement (CVA) proposals.
The votes are for creditors - primarily landlords of the stores - who must either agree to cut their rents by approving the deal, or risk the collapse of Arcadia, leaving them with empty sites and no rent.The votes are for creditors - primarily landlords of the stores - who must either agree to cut their rents by approving the deal, or risk the collapse of Arcadia, leaving them with empty sites and no rent.
Voting was supposed to take place last Wednesday, but was postponed when it became clear that some of the CVA proposals were heading for failure without more concessions from Sir Philip and Arcadia.Voting was supposed to take place last Wednesday, but was postponed when it became clear that some of the CVA proposals were heading for failure without more concessions from Sir Philip and Arcadia.
It is understood that only those proposals which did not receive enough support at a previous meeting last week will be voted on again.It is understood that only those proposals which did not receive enough support at a previous meeting last week will be voted on again.
If passed at a meeting in central London at 12pm on Wednesday, at least 23 stores will close.If passed at a meeting in central London at 12pm on Wednesday, at least 23 stores will close.
A further 25 Miss Selfridge and Evans outlets have also been earmarked for closure as part of a restructuring process that is separate from the CVAs.A further 25 Miss Selfridge and Evans outlets have also been earmarked for closure as part of a restructuring process that is separate from the CVAs.
Sir Philip has since offered a concession to landlords in a bid to sweeten the deal, proposing to impose less severe rent cuts than originally planned.Sir Philip has since 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%.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%.
It remains to be seen whether enough property owners will be convinced to support the process.It remains to be seen whether enough property owners will be convinced to support the process.
Speaking to the Press Association, one landlord said the Arcadia CVA plans are different from previous ones from House of Fraser or Debenhams because the smaller units would be easier to fill with new occupiers.Speaking to the Press Association, one landlord said the Arcadia CVA plans are different from previous ones from House of Fraser or Debenhams because the smaller units would be easier to fill with new occupiers.
“There was some sympathy for Debenhams,” he said.“There was some sympathy for Debenhams,” he said.
“Whereas here you’ve got a bigger pool of potential tenants. You’ve got more options so it’s easier to vote against it.“Whereas here you’ve got a bigger pool of potential tenants. You’ve got more options so it’s easier to vote against it.
“Not that many people are that emotional about it - there’s no tears for Philip Green.”“Not that many people are that emotional about it - there’s no tears for Philip Green.”
Incidentally, the Green family yacht has been sighted -- at Sanrimo, Italy.Incidentally, the Green family yacht has been sighted -- at Sanrimo, Italy.
As with last week's #Arcadia rescue meeting, Sir Philip Green is not expected to attend today. Last month the company said he "has not been present in the London Head Offices for nearly a year".His yacht is currently on the Italian coast. pic.twitter.com/ASPtMnoGHQAs with last week's #Arcadia rescue meeting, Sir Philip Green is not expected to attend today. Last month the company said he "has not been present in the London Head Offices for nearly a year".His yacht is currently on the Italian coast. pic.twitter.com/ASPtMnoGHQ
Retail experts are watching events at Arcadia closely today.Retail experts are watching events at Arcadia closely today.
Analyst Nick Bubb says:Analyst Nick Bubb says:
The increasingly embattled Philip Green is scrambling to save his business after further principled resistance from Intu Properties to the Arcadia CVA plan.The increasingly embattled Philip Green is scrambling to save his business after further principled resistance from Intu Properties to the Arcadia CVA plan.
Ian Shepherd points out that the crisis in Britain’s high street extends beyond Arcadia:Ian Shepherd points out that the crisis in Britain’s high street extends beyond Arcadia:
Re: the Arcadia CVA. It will anger many that Philip Green has siphoned so much cash out of the business. It's still true, however, that the retail market needs a reboot on rental. 13% of the 317k shops in the UK are currently vacant. That is not sustainable.Re: the Arcadia CVA. It will anger many that Philip Green has siphoned so much cash out of the business. It's still true, however, that the retail market needs a reboot on rental. 13% of the 317k shops in the UK are currently vacant. That is not sustainable.
Some of the opposition to Arcadia’s restructuring plan stems from the fact that the Green family are so stonkingly wealthy.Some of the opposition to Arcadia’s restructuring plan stems from the fact that the Green family are so stonkingly wealthy.
Lady Tina Green (who actually owns the company) famously collected a £1.2bn special dividend back in 2005. That has helped to support a glamorous lifestyle abroad.... think luxury yachts, private jets and glitzy parties.Lady Tina Green (who actually owns the company) famously collected a £1.2bn special dividend back in 2005. That has helped to support a glamorous lifestyle abroad.... think luxury yachts, private jets and glitzy parties.
Landlords will also have noted that Lady T splashed out £190,000 on a bottle of 1869 Chateau Lafite Rothschild. In her defence, the money went to a cancer charity - but it’s reminded critics that the family won’t be seeking out Monaco’s nearest food bank anytime soon.Landlords will also have noted that Lady T splashed out £190,000 on a bottle of 1869 Chateau Lafite Rothschild. In her defence, the money went to a cancer charity - but it’s reminded critics that the family won’t be seeking out Monaco’s nearest food bank anytime soon.
My colleague Nils Pratley, though, argues that creditors should look beyond the £100m Lionheart yacht, and approve the deal to keep Top Shop, Miss Selfridge et al running.My colleague Nils Pratley, though, argues that creditors should look beyond the £100m Lionheart yacht, and approve the deal to keep Top Shop, Miss Selfridge et al running.
Green and his wife paid themselves a £1.2bn dividend from Arcadia in 2005 and could, in any subsequent year, have chosen to hand back some of their winnings to repair the pension deficit. Instead, they still cruise the Mediterranean in a superyacht.Green and his wife paid themselves a £1.2bn dividend from Arcadia in 2005 and could, in any subsequent year, have chosen to hand back some of their winnings to repair the pension deficit. Instead, they still cruise the Mediterranean in a superyacht.
For parallel reasons, you see why Intu is furious. If it agrees rental concessions to a billionaire sunning himself in the waters off Monaco, what’s it supposed to say to other tenants who would also like to pay less? On the other hand, Intu is kidding itself if it thinks it can seriously halt the slide in rental values in retail land. After three upwards only decades, the market has turned.For parallel reasons, you see why Intu is furious. If it agrees rental concessions to a billionaire sunning himself in the waters off Monaco, what’s it supposed to say to other tenants who would also like to pay less? On the other hand, Intu is kidding itself if it thinks it can seriously halt the slide in rental values in retail land. After three upwards only decades, the market has turned.
Neither side deserves to win this CVA fight, in other words. In the absence of an honourable victor, preserving jobs and securing even an underwhelming pensions deal (£175m of cash over three years, plus £210m of securities) should be the priority. Best to allow Arcadia to limp on.Neither side deserves to win this CVA fight, in other words. In the absence of an honourable victor, preserving jobs and securing even an underwhelming pensions deal (£175m of cash over three years, plus £210m of securities) should be the priority. Best to allow Arcadia to limp on.
Philip Green's Topshop rescue deal still stands a chance | Nils PratleyPhilip Green's Topshop rescue deal still stands a chance | Nils Pratley
Chris Field, independent retail analyst and Chairman of Retail Connections, predicts that Arcadia’s creditors will reject today’s rescue deal.Chris Field, independent retail analyst and Chairman of Retail Connections, predicts that Arcadia’s creditors will reject today’s rescue deal.
However, he doesn’t believe this would plunge the company immediately into administration:However, he doesn’t believe this would plunge the company immediately into administration:
“I think they’ll reject Philip Green’s current rescue deal and there will be more discussions, but at some point, the landlords and shareholders are going to have to accept some kind of a deal. The UK retail environment is still a difficult one and, inevitably, there will be some casualties as the High Street reinvents itself.“I think they’ll reject Philip Green’s current rescue deal and there will be more discussions, but at some point, the landlords and shareholders are going to have to accept some kind of a deal. The UK retail environment is still a difficult one and, inevitably, there will be some casualties as the High Street reinvents itself.
While the deal remains on a knife edge - and I do foresee the investors turning the knife on the deal - the outcome of Sir Philip’s retail empire is by no means certain.While the deal remains on a knife edge - and I do foresee the investors turning the knife on the deal - the outcome of Sir Philip’s retail empire is by no means certain.
Things never are as dire as the business owners like to say, and Sir Philip is no fool; this is a a man who won Retailer of the Year just a few years ago and, ultimately, money comes first - this could well be the catalyst for reinvention, rather than the ultimate road to ruin for Arcadia.”Things never are as dire as the business owners like to say, and Sir Philip is no fool; this is a a man who won Retailer of the Year just a few years ago and, ultimately, money comes first - this could well be the catalyst for reinvention, rather than the ultimate road to ruin for Arcadia.”
The BBC’s Sean Farrington has recorded a handy explanation of today’s vote on Arcadia’s future:The BBC’s Sean Farrington has recorded a handy explanation of today’s vote on Arcadia’s future:
18,000 jobs at risk at the likes of Topshop, Burton, Dorothy PerkinsMore than 500 shopsWill landlords agree to rent reduction proposals from Sir Philip + Lady Tina Green?Or will they think the couple, worth £950m, should put more cash in?@bbcbreakfast #arcadia #highstreet pic.twitter.com/BSEXh3Bgvf18,000 jobs at risk at the likes of Topshop, Burton, Dorothy PerkinsMore than 500 shopsWill landlords agree to rent reduction proposals from Sir Philip + Lady Tina Green?Or will they think the couple, worth £950m, should put more cash in?@bbcbreakfast #arcadia #highstreet pic.twitter.com/BSEXh3Bgvf
Arcadia’s problems are partly due to the rise in internet shopping. The company’s sales and profits have slumped as shoppers shun the high street in favour of buying online.Arcadia’s problems are partly due to the rise in internet shopping. The company’s sales and profits have slumped as shoppers shun the high street in favour of buying online.
Bang on cue, UK online fashion group Boohoo have underlined this -- reporting a 39% surge in revenue in the last three months.Bang on cue, UK online fashion group Boohoo have underlined this -- reporting a 39% surge in revenue in the last three months.
Boohoo, which owns the PrettyLittleThing and Nasty Gal brands, says it is “well-positioned to disrupt, gain market share and capitalise on the global opportunity in front of us.”Boohoo, which owns the PrettyLittleThing and Nasty Gal brands, says it is “well-positioned to disrupt, gain market share and capitalise on the global opportunity in front of us.”
In other words, watch out Arcadia!In other words, watch out Arcadia!
Boohoo offering timely reminder of why Arcadia is in the pickle it is. Total revenue up 39%. Even in UK, its most mature market, up 27%Boohoo offering timely reminder of why Arcadia is in the pickle it is. Total revenue up 39%. Even in UK, its most mature market, up 27%
Property Week agree that the vote of Land Securities (one of the UK’s largest commercial property firms) will be crucial today. They say:Property Week agree that the vote of Land Securities (one of the UK’s largest commercial property firms) will be crucial today. They say:
Landsec holds Arcadia’s survival in its hands for the second week in a row.Landsec holds Arcadia’s survival in its hands for the second week in a row.
Even if the commercial property giant abstains, that is expected to be enough to give Sir Philip Green victory.Even if the commercial property giant abstains, that is expected to be enough to give Sir Philip Green victory.
Arcadia remains hopeful that landlords will approve its CVA deal today, at the second time of asking.Arcadia remains hopeful that landlords will approve its CVA deal today, at the second time of asking.
One insider told Retail Week:One insider told Retail Week:
“Arcadia wouldn’t take it to a vote tomorrow if it wasn’t hopeful of getting it over the line. It would have pulled the plug and gone into administration instead.”“Arcadia wouldn’t take it to a vote tomorrow if it wasn’t hopeful of getting it over the line. It would have pulled the plug and gone into administration instead.”
The threat of administration looks like Green’s best weapon. He can tell landlords that their choice is lower rent, or no rent at all.The threat of administration looks like Green’s best weapon. He can tell landlords that their choice is lower rent, or no rent at all.
However, this ultimatum rather lost its force last Wednesday when Arcadia delayed the CVA vote in the face of defeat, rather than plunge into administration. That handed power to the landlords, forcing Sir Phil to put more his family’s money into the deal.However, this ultimatum rather lost its force last Wednesday when Arcadia delayed the CVA vote in the face of defeat, rather than plunge into administration. That handed power to the landlords, forcing Sir Phil to put more his family’s money into the deal.
Philip Green pledges family cash to save Topshop rescue dealPhilip Green pledges family cash to save Topshop rescue deal
With Arcadia’s future up in the air, shoppers would be wise to check their purses and wallets for any gift cards from Top Shop, Miss Selfridge, Dorothy Perkins and Burton.With Arcadia’s future up in the air, shoppers would be wise to check their purses and wallets for any gift cards from Top Shop, Miss Selfridge, Dorothy Perkins and Burton.
Should the company fall into administration, such cards might be hard to redeem:Should the company fall into administration, such cards might be hard to redeem:
Got a Topshop or Miss Selfridge gift card? Then use it nowGot a Topshop or Miss Selfridge gift card? Then use it now
With shopping centre owner INTU opposing the Arcadia structuring, the position of other landlords is now crucial.With shopping centre owner INTU opposing the Arcadia structuring, the position of other landlords is now crucial.
Land Securities, which owns 12Land Securities, which owns 12
2424
Arcadia outlets, is a crucial ‘swing voter’, as my colleague Sarah Butler explains: Arcadia outlets, is a crucial ‘swing voter’, as my colleague Sarah Butler explains:
The likelihood of M&G backing the deal looked slim on Tuesday night after it emerged that the investment company was taking legal action against Debenhams’ CVA which was approved by creditors last month.The likelihood of M&G backing the deal looked slim on Tuesday night after it emerged that the investment company was taking legal action against Debenhams’ CVA which was approved by creditors last month.
However, there were rumours that Aviva was now prepared to back the deal while others, including the Crown Estate, Land Securities and Aberdeen Standard were still wavering. The position of Land Securities, one of the most significant waverers, was also unclear on Tuesday night. Land Securities owns shopping centres including Bluewater in Kent, and One New Change in the City of London.However, there were rumours that Aviva was now prepared to back the deal while others, including the Crown Estate, Land Securities and Aberdeen Standard were still wavering. The position of Land Securities, one of the most significant waverers, was also unclear on Tuesday night. Land Securities owns shopping centres including Bluewater in Kent, and One New Change in the City of London.
Sources at one major landlord said they did not think the revised offer was enough and that there was a strong chance the deal would fail.Sources at one major landlord said they did not think the revised offer was enough and that there was a strong chance the deal would fail.
“There was no consultation before [the new deal was put out]. It was ‘that’s it and we’re off’ … It feels pretty close,” the source said.“There was no consultation before [the new deal was put out]. It was ‘that’s it and we’re off’ … It feels pretty close,” the source said.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The future of Sir Philip Green’s retail empire, and the jobs of 18,000 staff, hang in the balance this morning.The future of Sir Philip Green’s retail empire, and the jobs of 18,000 staff, hang in the balance this morning.
The landlords who own Arcadia’s stores across the UK are heading to central London to vote on whether to accept a restructuring plan that will lead to hundreds of job cuts and scores of store closures.The landlords who own Arcadia’s stores across the UK are heading to central London to vote on whether to accept a restructuring plan that will lead to hundreds of job cuts and scores of store closures.
If they reject the offer, then Arcadia could sink into administration - one of the biggest retail failures for years.If they reject the offer, then Arcadia could sink into administration - one of the biggest retail failures for years.
Today’s vote is extremely close. We know that because Green was forced to dramatically halt a vote on this Company Voluntary Arrangement a week ago -- once it became clear that landlords weren’t playing ball.Today’s vote is extremely close. We know that because Green was forced to dramatically halt a vote on this Company Voluntary Arrangement a week ago -- once it became clear that landlords weren’t playing ball.
Vote on Green's Arcadia plan postponed with 18,000 jobs on the lineVote on Green's Arcadia plan postponed with 18,000 jobs on the line
Green has been working the phones since (his famous old Nokia handset must be red hot), trying to twist landlords’ arms to approve the plan.Green has been working the phones since (his famous old Nokia handset must be red hot), trying to twist landlords’ arms to approve the plan.
He has also been forced to sweeten the original deal -- reducing the rent cuts which landlords were being asked to swallow. They now face a hit of 25%-50%, down from 30% to 70% before.He has also been forced to sweeten the original deal -- reducing the rent cuts which landlords were being asked to swallow. They now face a hit of 25%-50%, down from 30% to 70% before.
But it may not be enough! Property group INTU has indicated it will oppose the CVA deal again today. That’s bad news for Green - INTU owns 35 Arcadia stores, or around 15% of the vote.But it may not be enough! Property group INTU has indicated it will oppose the CVA deal again today. That’s bad news for Green - INTU owns 35 Arcadia stores, or around 15% of the vote.
Arcadia needs 75% support to get the restructuring deal over the line, soArcadia needs 75% support to get the restructuring deal over the line, so
One INTU source argues that Arcadia’s proposal isn’t fair.One INTU source argues that Arcadia’s proposal isn’t fair.
Arcadia is asking for a significant discount on valuable space, and Intu is not prepared to give way. Intu wants to create a fair environment for all its retailers and taking a huge haircut from one of them is not fair.”Arcadia is asking for a significant discount on valuable space, and Intu is not prepared to give way. Intu wants to create a fair environment for all its retailers and taking a huge haircut from one of them is not fair.”
Arcadia on the brink after Intu rejects revised CVA planArcadia on the brink after Intu rejects revised CVA plan
The meeting kicks off at noon, near St Paul’s. By the end of the day, we’ll know if the bell is tolling for Green’s empire, and the jobs of thousands of staff at Top Shop, Miss Selfridge, Dorothy Perkins and Burton.The meeting kicks off at noon, near St Paul’s. By the end of the day, we’ll know if the bell is tolling for Green’s empire, and the jobs of thousands of staff at Top Shop, Miss Selfridge, Dorothy Perkins and Burton.
Also coming upAlso coming up
Trade war jitters continue to dominate the financial markets, as investors wonder if Donald Trump and Xi Jinping will reach a deal at the G20 meeting later this month.Trade war jitters continue to dominate the financial markets, as investors wonder if Donald Trump and Xi Jinping will reach a deal at the G20 meeting later this month.
European stock markets are expected to open lower, as recent optimism fizzles...European stock markets are expected to open lower, as recent optimism fizzles...
Futures sliding further:#FTSE 7367 -0.43%#DAX 12089 -0.55%#CAC 5379 -0.55%#MIB 20470 -0.68%#IBEX 9236 -0.50%Futures sliding further:#FTSE 7367 -0.43%#DAX 12089 -0.55%#CAC 5379 -0.55%#MIB 20470 -0.68%#IBEX 9236 -0.50%
The latest US inflation data may also move markets, as it could help determine whether America’s Federal Reserve central bank cuts interest rates soon (as Trump is demanding).The latest US inflation data may also move markets, as it could help determine whether America’s Federal Reserve central bank cuts interest rates soon (as Trump is demanding).
This is because the Euro and other currencies are devalued against the dollar, putting the U.S. at a big disadvantage. The Fed Interest rate way too high, added to ridiculous quantitative tightening! They don’t have a clue! https://t.co/0CpnUzJqB9This is because the Euro and other currencies are devalued against the dollar, putting the U.S. at a big disadvantage. The Fed Interest rate way too high, added to ridiculous quantitative tightening! They don’t have a clue! https://t.co/0CpnUzJqB9
The agendaThe agenda
9.15am BST: European Central bank president Mario Draghi speech on “global headwinds”9.15am BST: European Central bank president Mario Draghi speech on “global headwinds”
Noon: Arcadia creditor meeting beginsNoon: Arcadia creditor meeting begins
1.30pm BST: US inflation figures for May1.30pm BST: US inflation figures for May