Topshop Will Announce Bankruptcy Restructuring Plan

The poor performance of Arcadia Group Ltd., the parent company of British high street fashion brand Topshop, is about to be announced with the bankruptcy restructuring plan announced this week.

The Sunday Times claims to have reviewed the “Company Voluntary Agreement” (CVA) program of Arcadia Group Ltd. and disclosed that the group’s revenue fell 10.5% year-on-year to 1.7 billion in the fiscal year ending August 2018. Sterling, comparable sales also recorded a 7.5% decline.

According to market research firm Kantar Kaddu, Arcadia Group Ltd.'s revenue fell further 5% in the first 12 weeks of March 10, 2019. Analysts pointed out that the group's recession began in the summer of 2015, and the market share has shrunk by 100 basis points to 3.2% so far.

Under the impact of the changes in the retail industry, the weak demand in the UK and the competition in the same industry, Arcadia Group Ltd., which has not been able to invest enough by owner Philip Green, has been devastated. The flagship brand Topshop is the first to bear the brunt of the brand's comparable sales before Christmas. A sharp drop of 20% year-on-year.

The retail and real estate industry described the group's stores as “boring” and “depreciated”, and the brand online shopping platform was completely unable to compete with ASOS PLC (ASC.L), Boohoo Group PLC (BOO.L), its Dorothy Perkins and Miss Selfridge. Brands are also outdated.

Philip Green plans to close 57 stores in the UK through the CVA program and seek to lower the average rent of 30% for the remaining 459 stores. Some commercial real estate developers pointed out that if Arcadia Group Ltd. does not resort to CVA and other means, it is likely to go bankrupt within six months. If Philip Green fails to reach an agreement with the owner on CVA before the quarterly rent limit at the end of June, it will also Face the risk of bankruptcy.

Due to the complex architecture of Arcadia Group Ltd., the group is required to apply for eight CVAs, and each program receives at least 75% of store owners' support. It is reported that the owner is dissatisfied with Philip Green's commitment to inject 100 million pounds of cash into Arcadia Group Ltd. to renovate the store and rebuild the brand. In addition, Philip Green proposed to exchange the 10% stake in Arcadia Group Ltd. for the owner to support CVA, but some owners requested The proportion has increased to 30%.

At the same time, Philip Green is negotiating with pension fund trustees at Arcadia Group Ltd. to cut back on pensions. Two years ago, he raised Arcadia Group Ltd.'s annual pension for the next ten years from £25 million to £50 million in the turmoil of the BHS department store bankruptcy. He is now planning to re-down to £25 million. It is reported that pension regulators and the UK Pension Protection Fund Pension Protection Foundation have rejected Philip Green's request and they have the right to vote against the CVA of Arcadia Group Ltd.

The supply chain has also created a higher capital turnover pressure for the group, and its suppliers have no access to credit insurance, meaning that the group needs sufficient cash prepaid goods.

The media said that Philip Green Dacoz does not rule out the sale or end of international business, and most of the international market is currently losing money. Currently Arcadia Group Ltd. has 1,170 outlets in 36 countries, more than half of which are department store counters. Only independent stores in Ireland, France, Germany, the Netherlands, the United States and Australia are directly operated by the group. Last month, Philip Green just bought back a 25% stake in Topshop/Topman's US business in private equity firm Leonard Green & Partners LP for £1.

Some sources in the real estate industry told the Guardian: "Now Green's name is simply poisonous." Based on the scale of Arcadia Group Ltd.'s business, its impact on local communities, and a series of Philip Green's misdeeds, the source expects its CVA to be Caused huge controversy.

It is reported that in October 2018, Philip Green tried to legally block the password, but instead of racist and sexual harassment by politicians, he left the UK and did not set foot on the London headquarters of Arcadia Group Ltd.

Philip Green's wife, Tina Green, is a resident of Monaco, a tax haven. Someone who also settled in Monaco's "Sunday Times Rich List" revealed to the media that Philip Green often walks alone on the waterfront. "He doesn't look good," the rich man claimed.

Philip Green's Arcadia Group Ltd. issued £1.2 billion to Taveta Investments Ltd., a holding company controlled by Tina Green, in 2005 in the name of repaying loan interest. Over the years, Philip Green has earned more than £1.5 billion from Taveta Investments Ltd. However, in 2015, BHS Department Store, which had a pension deficit of 571 million pounds, sold for £1 to Dominic Chappell, a former bankrupt who had no retail experience and three bankruptcies, resulting in the bankruptcy of the 87-year-old British traditional department store a year later. Eventually closed down.

According to the "Sunday Times 2019 Rich List" released last week, the net assets of the Philip Green couple have evaporated by 1.05 billion pounds in the past year, and their net worth has dropped sharply from 4.9 billion pounds in the peak of 2006 and 2007 to 950 million pounds. What's more, due to the huge pension deficit of Arcadia Group Ltd. and the large number of loss-making stores ready to close down, the group that valued the £750 million valuation of the Rich List last year is now worthless.