Sir Philip Green offers Topshop flagship as Arcadia pension security

Topshop flagship pension
// Sir Philip Green offers Topshop flagship for Arcadia’s pension security
// The offer comes two years after he was embroiled in a pension scandal with BHS
// Green is trying to win creditors’ support for an imminent restructure or CVA

Sir Philip Green has reportedly offered the flagship Oxford Circus store of Topshop as pension security amid plans to restructure his Arcadia Group retail empire.

It comes as Arcadia – which has been struggling with dwindling sales, an extensive and unprofitable property portfolio, as well as controversy surrounding sexual harassment and bullying allegations against Green – prepares to launch a major restructuring scheme.

There is growing speculation that the scheme could be launched this month and possibly in the form of a CVA, which could entail dozens of store closures, hundreds of job cuts and rent reductions on scores of stores.

Green’s company also proposed to halve the annual contributions it makes to its pensions scheme, from the £50 million down to £25 million.

However, a CVA would need approval from Arcadia’s creditors – including landlords and the Pension Protection Fund.

According to The Sunday Times, The Pensions Regulator reportedly “pushed back hard” on Green’s attempts to lower contributions due to how he handled the BHS pension scandal.

In 2017, Green was forced to plug up to £363 million to the pension scheme of thousands of former BHS workers following months of discussions and controversy.

Arcadia had owned BHS for 15 years. It collapsed in 2016 under the ownership of Dominic Chappell, who had bought the chain from Green for £1 the year prior.

Arcadia’s pension scheme currently has thousands of members and is understood to currently have deficit of about £550 million on a conventional funding basis and £750 million on a full buyout basis.

Green has offered to give the funds security over Topshop Oxford Street, The Sunday Times reported.

The lease for the retailer’s flagship store is said to be worth as much as £600 million.

The news comes two weeks after Green appointed two restructuring specialists to Arcadia’s board of directors.

Jamie Drummond-Smith was made chair of Topshop, Topman, Arcadia Group and its parent company Taveta, while Peter Bloxham joined the board as a director.

Arcadia has also reportedly drawn up a list of stores it wants to close down across the UK and Ireland, as it continues to work with advisers on a review of the business.

The firm reportedly offered shares of up to 20 per cent to landlords in a bid to gain their support for its restructuring plans.

The future of Arcadia’s international stores also remain uncertain.

More recently, US private equity firm Leonard Green and Partnerss sold its 25 per cent stake in Topshop & Topman back to Arcadia for an undisclosed sum.

The firm had originally bought its stake for £350 million in 2012.

Arcadia has 1170 shops in 36 countries outside the UK, many of which are department store concessions or franchises.

The retail empire comprises Topshop and Topman, Dorothy Perkins, Wallis, Evans, Burton and Miss Selfridge.

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