Topshop’s parent company Arcadia. which averted collapse last month, has had its rescue plan challenged by a US creditor.
Sir Philip Green’s company – whose brands include Topshop, Dorothy Perkins and Burton – narrowly secured backing from its creditors in June for a restructuring plan to try and turn around its fortunes.
The plan included seven so-called company voluntary arrangements (CVAs), as well as an agreement to cut costs by closing 48 of 566 trading outlets that employ 18,000 staff across the UK and Ireland.
But Arcadia says it has now received applications challenging the plan from US creditor and New York-based property group Vornado Realty Trust.
Vornado, under through its subsidiaries – 480-486 Broadway LLC & TMO 1 LLC – has objected to the retail group’s Topshop and Topman CVAs.
Vornado is Topshop’s landlord in New York, where the retailer is based at the heart of two of the city’s renowned fashion retail strips – 5th Avenue and Broadway.
Arcadia Group chief executive Ian Grabiner said: “These challenges are entirely without merit and we will vigorously defend them.
“The CVAs are a vital part of our restructuring, putting the business on a firm financial footing and enabling significant investment as part of our growth plans which will ultimately benefit all our stakeholders.
“Our group continues to trade as normal and we remain focused on delivering our turnaround plans.”
Along with Arcadia, several high street retail chains – including Mothercare, House of Fraser, Carpetright and New Look have all employed CVAs, after coming under pressure from dwindling consumer confidence at a time of increased costs from business rates and minimum wage rules.