LONDON, July 16 — Philip Green’s fashion empire Arcadia Group said today it received applications from legal entities of US-based property group Vornado challenging two of its seven planned Company Voluntary Agreements (CVAs).
Arcadia said the challenges to the CVAs, which were approved in June by the majority of creditors, were “without merit” and it would defend itself against them.
Vornado, a landlord to some of the Topshop and Topman stores in New York, was not available to respond to Reuters request for a comment outside of business hours.
Arcadia’s other landlords include British Land, Intu Properties, Aviva and Land Securities .
CVAs have been carried out by several British retailers, including fashion chain New Look, floor coverings firm Carpetright, mother-and-baby goods group Mothercare and department store chains House of Fraser and Debenhams.
Landlords of UK retail property, however, are starting to fight back against tenants proposing CVAs in order to close stores and reduce their rent burden.
Earlier in the month, Debenhams said M&G Real Estate had agreed to withdraw the court action related to its CVA that wiped out investors but kept the company operating. The company has also been challenged by former shareholder Sports Direct over the plan.
Arcadia’s restructuring will close stores, cut rents and make changes to the funding of the group’s pension schemes, but it will enable it to keep operating under the Green family’s ownership.
“Our Group continues to trade as normal and we remain focused on delivering our turnaround plans,” Arcadia Group Chief Executive Ian Grabiner said in an email statement. — Reuters
