// 2 US landlords of Topshop owner Arcadia have dropped their challenge to its restructuring plans
// This clears the way for Arcadia’s 7 CVAs to go ahead.
Arcadia Group is poised to press ahead with store closures and rent cuts after two US landlords withdrew their legal challenges to its CVAs.
Sir Philip Green’s retail empire said the landlords, Vornado and Caruso, had agreed to drop their challenges following “significant and constructive dialogue”.
This means Arcadia is now free to move forward with its CVAs which were voted through by creditors in June.
After Arcadia’s CVA in the UK was given the green light, it decided to push its US subsidiary into administration.
Arcadia operates 11 Topshop stores in the US including New York, Miami, Las Vegas and Chicago.
In papers filed in a New York bankruptcy court days after the UK CVA was agreed, a group of Topshop landlords including Vornado and Caruso argued that they were “frozen out” of the process, and that they are affected by it because it may result in reduced recoveries for US creditors.
Arcadia chief executive Ian Grabiner said the latest news means all seven of the company’s CVAs could 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.”
A major facet of Arcadia’s CVAs includes 23 store closures in the UK, putting around 1000 jobs at risk.
Another 25 operating under the Miss Selfridge and Evans stores are also in the process of being shuttered, while landlords of some remaining shops will be paid a reduced rent bill.
The proposals have been the subject of controversy since they were made public, with the initial meeting to pass the CVAs being adjourned due to a lack of support.
Green and his wife Lady Tina later added amendments to the proposals to win over landlords and the plans were eventually approved.