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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.
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.
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.
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, so
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.”
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 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.
European stock markets are expected to open lower, as recent optimism fizzles…
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).
- 9.15am BST: European Central bank president Mario Draghi speech on “global headwinds”
- Noon: Arcadia creditor meeting begins
- 1.30pm BST: US inflation figures for May