Sir Philip Green’s Arcadia has secured help from HSBC in an attempt to reassure suppliers as the retailer looks to get a rescue deal over the line.
HSBC has agreed to stand behind Arcadia’s debts to suppliers, which have asked for advance payments since credit insurers withdrew some support this year. This has meant HSBC taking security over Arcadia’s cash deposits, Companies House records show. In return it is understood that the bank will underwrite letters of credit to Arcadia’s suppliers if required.
Arcadia is working to garner support from creditors, including landlords and suppliers, for a company voluntary arrangement, a type of insolvency. The group is behind Sir Philip’s retail empire, which includes Topshop and Topman as well as Dorothy Perkins and Burton. Sir Philip, 67, is trying to reorganise Arcadia amid a trading slump that is affecting much of the high street. It is understood that Arcadia, which has about 570 British shops, is hoping to hold the vote within a fortnight. Three quarters of creditors need to approve the plan for it to pass.
Landlords are said to have been offered a 10 per cent stake in Arcadia in return for rent reductions. The CVA would be expected to involve store closures. Leonard Green & Partners, an American private equity firm, sold its 25 per cent stake in Topshop and Topman for $1 this month. It was said to have paid £350 million in 2012.
Arcadia’s most recent accounts show that operating profits fell to £124.1 million in the year to August 26, 2017, from £215.2 million a year earlier. Sales fell by 5.6 per cent to £1.9 billion.
A spokesman for Arcadia declined to comment. HSBC did not respond to a request for comment.
