Topshop owner Arcadia to withhold part of rent bill

By

Barbara Santamaria

Published
Mar 20, 2020

Philip Green is trying to slash Arcadia’s rent bill in a bid to strengthen its cash position ahead of tough times in retail globally.

The group, which owns popular high street brands including Topshop, Topman and Dorothy Perkins, is understood to have approached landlords about plans to withhold at least part of a multimillion pound bill. The payments are due next week.

An industry source told Sky News that Arcadia wants to cut rents by as much as 50%, just three months after securing heavy discounts through a Company Voluntary Arrangement.

The business operates a sizable store estate and employs about 18,000 people, making it particularly vulnerable to changes on the high street. Like many other retailers, the company has seen a dramatic fall in sales across its brands this week as footfall in retail areas has slumped.

Additionally, the stores are now facing an unprecedented shutdown that could last several weeks.

It’s unclear how many landlords will agree with the cuts, but given the challenges facing retail it may be in the interests of both property owners and tenants to find common ground.

Last year, Arcadia narrowly secured creditor’s support for a bailout, with landlords approving the company’s CVA plan at a second attempt.