Sir Philip Green’s Arcadia retail empire has been saved by a rescue deal that will trigger the closure of 48 stores and a thousand jobs.
The plan, covering stores including Topshop, Miss Selfridge and Wallis, was approved by Arcadia’s creditors.
After a week’s delay and five hours of discussion Arcadia’s landlords finally agreed to rent cuts, 23 store closures and 520 job losses.
Once the plan is in place another 25 stores and 500 jobs will be axed.
Ian Grabiner, CEO of Arcadia Group, said he was “confident about the future of Arcadia”.
“From today, with the right structure in place to reduce our cost base and create a stable financial platform for the Group, we can execute our business turnaround plan to drive growth.”
The rescue plan, known as a Company Voluntary Arrangement (CVA), forces store closures and reduced rents across 194 of its 566 UK and Irish stores over a three-year period.
But Arcadia came up against stiff resistance from one of its biggest creditors, Intu, which called the deal “unfair” and voted against it.
Intu owns and manages some of the UK’s biggest retail properties.
A spokesperson for the group said: “We firmly believe that the terms of the Arcadia CVA are unfair to our full rent paying tenants and not in the interests of any of our other stakeholders, including Intu shareholders and the 130,000 people whose jobs rely on the success of our prime shopping centres.”
Lady Tina Green, Sir Philip Green’s wife and Arcadia’s majority shareholder, has agreed to invest £50m of equity into the group, in addition to the £50m of funding already provided in March.
However some analysts believe it may be too little too late.
The investment would be “too thinly spread”, Chloe Collins, senior retail analyst at GlobalData said.
“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,” she added.
Lady Green has also committed to pay £25m annually into the pension funds over three years, plus an additional £25m.
Rt Hon Frank Field MP, Chair of the Work and Pensions Committee, said: “Now that, thankfully, Arcadia’s life has been extended, the Committee will try to ensure that the Pensions Regulator gets an effective programme in place to ensure that Arcadia staff receive in full the pensions that Sir Philip and Lady Green have promised them.”