Pensions Regulator demands contribution top up from Sir Philip Green

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Arcadia pension
// Sir Philip Green met with demands to top up his pension contribution for Arcadia’s scheme
// The Pensions Regulator said he must pay an additional £50m to what he has already offered
// The regulator said they would not support the CVA unless he met their demand

Sir Philip Green has been met with demands to top up his contribution to Arcadia Group’s pension scheme in exchange for supporting its proposed CVA.

According to Sky News, The Pensions Regulator is reportedly demanding an additional £50 million contribution to Arcadia’s retirement fund, otherwise it would not support the CVA proposals.

Lady Tina Green – wife of Sir Philip and ultimate shareholder of Arcadia – has already pledged to inject £50 million of equity into the retail empire, on top of £50 million she has already loaned.

She has also separately offered £100 million to address Arcadia’s shortfall in pension contributions, in addition to providing £185 million in security from property assets, as part of a bid to win approval for its CVA.

This includes security over Arcadia’s flagship Topshop Oxford Street store, which would allow the property to be sold to shore up the pension deficit if a CVA is not enough to replenish Arcadia’s coffers.

Arcadia’s pension debt is reportedly around £565 million.

Following Arcadia’s announcement of a CVA last week, The Pensions Regulator said the proposed attempts to cover the pension shortfall were not sufficient.

“We note from the CVA announcement that the shareholder is prepared to put an additional £100 million into the scheme over a number of years to bridge a shortfall in deficit recovery contributions,” it said.

“However, we do not consider the proposals are sufficient to ensure that members of the scheme are adequately protected.”

As part of its CVA proposals, Arcadia plans to reduce its annual pension contributions from £50 million to £25 million for three years.

The CVA also includes plans to shut 23 stores, resulting in 520 job cuts, as well as rent reductions on 194 additional stores across its UK and Irish operations.

Arcadia’s 11 Topman and Topshop stores in the US are also set to either close down or be sold off.

Another 25 stores under the Evans and Miss Selfridge fascias will shut down as part of separate insolvency proceedings, including the flagship Miss Selfridge store on Oxford Street.

Meanwhile, landlords also also pushing for changes to the CVA proposals after Lady Green offered them a stake of up to 20 per cent of any proceeds if Arcadia is eventually sold.

Arcadia directors will meet creditors – which includes The Pensions Regulator, the Pension Protection Fund and landlords – on June 5 to seek approval for its CVA proposals.

The CVA will only go ahead if at least 75 per cent of creditors vote in favour of it.

The tussle with The Pensions Regulator is nothing new for Green.

He was in the regulator’s sights after the 2016 collapse of BHS – once part of Arcadia for 15 years until he sold it off for £1 in 2015 – which resulted in the loss of 11,000 jobs and a £571 million pension black hole.

The retail tycoon was eventually forced to plug up to £363 million into the scheme of thousands of former BHS employees.

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2 COMMENTS

  1. This happened with BHS and it’s been allowed to happen again. My gut feeling is if the CVA isn’t approved partly because of this Arcadia is allowed to go in to administration.

    I think on top of everything else BHS, the inappropriate allegations made in the USA and UK he should be stripped of being called a Sir.

    Every single retailer he has run it’s been run in to the ground think Owen and Owen and MK One all gone now and BHS of course.

    The man is a professional stripper ( asset that is ).

    Feel sorry for the staff some 22k and the chains Burton dating from 1906 and DP dating from 1909 even Evans has history as does Miss Selfridge an off shoot of Selfridges in 1969. Wallis is also an old name (1930’s)

    I cannot see these names being picked up by other retailers only Top Shop and Man will survive. I can see Ashley acquiring the latter or someone like Day.

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