Philip Green prepares to split up Arcadia fashion empire

The fashion empire, which owns fashion retailers including Topshop, Miss Selfridge, Burton and Dorothy Perkins, has reportedly begun to separate shared functions across the businesses such as HR and IT.

According to The Sunday Times, Green held off starting the work to separate in-house functions across the fashion group until it had resolved legal challenges from two US landlords to Arcadia’s CVA, which were settled out of court last week.

The work to separate the internal functions of Arcadia’s retail portfolio is being overseen by chief executive Ian Grabiner, who has reportedly persuaded Green that his business empire will not be able to trade its way out of the challenges it is facing.

Sources close to the situation told The Sunday Times that any offloading of brands within the Arcadia empire would be handled in a discipline way, rather than in a “fire sale” to free up capital.

The Pensions Regulator would also be able to block any prospective disposals due to the £750m ‘buyout’ deficit in Arcadia’s retirement funds, which Green has pledged to add £385m to over the next three years as part of the group’s CVA deal.

The bulk of Arcadia’s functions including accounting and financing are currently centralised, although buying and merchandising is devolved to the individual brands.

Arcadia secured its CVA on its second attempt in June, winning approval from creditors to close 23 stores and reduce rents on nearly 200 others, safeguarding 17,000 jobs.