Sir Philip Green’s plan to rescue his ailing Arcadia retail business is at risk as the group’s largest landlord seems unlikely to support the plan.
A BBC report says shopping centre owner Intu is planning to vote against Green’s plan to save his business at a meeting today. Intu is said to be the landlord of 35 of Arcadia’s retail outlets, whose brands include Top Shop and Dorothy Perkins.
Green is hoping to turn round Arcadia via a CVA which, amongst other measures, would see landlords agree to rent cuts. Green is proposing rent reductions of between 25-50%. Although he has reduced this from the 30-70% previously proposed it is said Intu still consider this too much to support the deal.
Seeking hefty rent reductions seems a popular ‘get out of jail free’ card in the struggling retail sector at the moment, with Mike Ashley proving particularly adept at playing it. However, it is also a high stakes gamble for commercial property owners who are being faced with receiving less rent from fewer tenants – or potentially none at all.