Arcadia hails creditors’ support as CVA challenge dropped

The fashion empire’s chief executive Ian Grabiner said that, with the challenges dropped, Arcadia can press ahead with implementing “all the components” of its agreed CVA. 

“With these legal challenges now withdrawn all the components of the CVAs can now be implemented. On behalf of the board, I would like to thank all of our staff, customers and creditors for their loyal support during this tough period for retail businesses,” he said.

“We can now look forward to implementing our strategy and delivering our growth plan for the group.”

The retailer passed CVAs for its brands in June, at the second attempt, following a protracted battle with UK landlords and the pensions regulator over rent reductions, pension contributions and equitable stakes in the future business.

However, since winning adequate creditor support for its CVA, Arcadia has been dogged by twin challenges from US-based landlords Vornado and Caruso.

The two landlords pursued Arcadia and Sir Philip Green through US courts and accused the group of having “manipulated and gerrymandered” the CVA proposal to effect the “complete forfeiture and deprivation” of their rights.

It is understood that Green reached out-of-court settlements with the disgruntled landlords in exchange for them dropping their challenge.

A spokesman for the group said that while most elements of the agreed CVA were implemented “right away” by Arcadia, the challenges being dropped means there is “no more danger” to the process.

The spokesman also said that today’s announcement that Topshop had strengthened its wholesale relationship with Shop Direct was further evidence that the group was making good the restructuring plans it put forward to creditors as part of the CVA.

Arcadia proposed to close 50 stores and slash rents on a further 194, as well as close all of its US-based stores from its ill-fated move into the country.