Arcadia Group will go ahead with its planned store closures and rental cuts after all seven of its proposed company voluntary arrangements (CVAs) were approved by the required majority of creditors.
The CVA will see Arcadia close 23 stores across the UK and Ireland.
Lady Tina Green, the group’s majority shareholder and wife of Sir Philip Green, will invest 50 million pounds of equity into the group, in addition to the 50 million pounds of funding already provided in March.
The group has also reached an agreement with the Trustees of the pension schemes, the Pensions Regulator and the Pension Protection Fund, which will see Arcadia Group reducing its deficit repair contributions from 50 million pounds to 25 million pounds per year, for three years, with security granted to the value of 210 million pounds over certain assets of the Group.
Arcadia CEO 'confident' about the company's future
Lady Green will also provide an additional 100 million pounds of cash into the schemes to help bridge the shortfall, with funding of 25 million pounds per year for the next three years plus an additional 25 million pound contribution.
“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,” said Arcadia Group CEO, Ian Grabiner, in a statement.
“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 through our digital and wholesale channels, while ensuring our store portfolio remains at the heart of our customer offer.
“I am confident about the future of Arcadia and our ability to provide our customers with the very best multi-channel experience, deliver the fashion trends that they demand, and ultimately inspire a renewed loyalty to our brands that will support the long-term growth of our business.”
Photo credit: FashionUnited