Will the grass prove Greener on the other side of the Arcadia CVA vote?
I’m not so sure it will. Arcadia may have lived to fight another day after intu’s valiant stand was negated by Landsec’s last-gasp save, but Sir Philip doesn’t look to have a huge amount of fight left in him. There certainly wasn’t much fighting talk this week after it emerged that a group of US landlords, led by Vornado, had filed a legal challenge against Arcadia’s decision to put its US subsidiary into administration.
Then again, after the battering he has taken over recent weeks (not just over Arcadia), who can blame him? It must have been pretty demoralising to realise that his relieved assertion after the vote that “a win is a win” was a tad premature.
The battle may be over, but the war has just begun – on multiple fronts. The least of these is the US. Far bigger is the UK front, where Arcadia now has to work out what its future looks like having been yanked from the brink by its UK landlords. There are those who think the only way is up. It is true that the CVA process seems to have worked for New Look, which had its CVA approved in March 2018 and, coincidentally, had its credit rating upgraded by Moody’s on the day of the Arcadia creditors’ vote, for the second time in just a few months.
But Arcadia is a very different animal to New Look. It is – or was – a retail empire. The best-case scenario is savage cuts in the still huge number of stores and staff. The question is: how deep will the cuts go – and can it get its fashion mojo back?
Some think Green will close everything other than Topshop and possibly Dotty Ps then look for a buyer. He will certainly look to get shot of a lot more stores over the next 18 months as leases come up for renewal, especially among the 194 he wanted big rental discounts on.
And don’t be surprised if brands such as Miss Selfridge and Evans become concessions in larger Topshop stores and migrate online. Whether Green is too late to the online party, time will tell. Ditto whether he decides to stay in the retail game or gets out before there is nothing left to get out of. If the former, he urgently needs to refresh and reposition every brand. Even the once mighty Topshop has lost its relevance and become to young hipsters what M&S is to middle-aged fashionistas – #mehtoo.
In the meantime, he could yet rue telling the BBC that Arcadia “didn’t come close to collapse”. While he added “we won the vote”, some have questioned whether he meant that Arcadia was never close to collapse. If that is the case, then a CVA was not a legitimate course of action, and the US landlords currently spoiling for a fight that Green may not have much stomach for could well use it against him.
RESI 2019 calling
Today is the last day to get your hands on an early-bird ticket to RESI 2019. This year’s theme is ‘From 2020 to 2040 Vision: A Brave New Mixed-up World’ and we have already lined up a stellar cast of speakers, including housing minister Kit Malthouse. To book your ticket and find out more about this year’s convention, go to resiconf.com. Don’t miss out!