Sir Philip Green has made a last-ditch attempt to save his retail empire from collapse by seeking a less severe rent reduction from landlords of his stores.
Earlier this week, a vote on Sir Philip’s rescue deal for Arcadia, which includes Topshop, was postponed after some landlords refused to back it.
Sir Philip is now asking landlords to agree to rent cuts of between 25% and 50%, instead of 30% to 70%. This shortfall in rent will be plugged by £9.5m provided by the Green family.
However, that commitment could rise to up to £29m during the three-year period of the deal.
Landlords of the troubled group’s stores, which also include Miss Selfridge and Dorothy Perkins, were due to vote on the rescue deal, known as a Company Voluntary Arrangement (CVA), on Wednesday, but it was postponed “to conduct further dialogue with a few landlords”.
As well as rent cuts, the deal would have meant the closure of 48 stores and the loss of around 1,000 jobs.
Sir Philip is hoping his improved offer will persuade landlords to back his deal.
Arcadia chief executive Ian Grabiner said: “Having already secured the support of our pensions trustees, trade creditors and a significant number of landlords, we hope these final revised terms will ensure the majority of landlords support the CVA at next week’s vote.
“Their support is vital for the long-term sustainability of the group, our 18,000 employees and our extensive network of loyal suppliers.”
It’s understood improved terms on break clauses for leases are also being offered. Landlords will be voting again on 12 June. If the deal doesn’t pass then Arcadia says the group is very likely to enter administration.