Fashion empire Arcadia has secured its immediate future, after pursuading landlords to sign up for rent reductions and select closures across nearly 250 UK stores.
Billionaire Sir Philip Green - whose Arcadia group includes clothes retailers Topshop, Burton, Miss Selfridge, Dorothy Perkins, Evans and Wallis - clinched the majority support required to push through seven company voluntary agreements (CVAs) at the second try.
The controversial business chief failed to attend the key meeting with property owners on June 12, with CEO Ian Grabiner and chairman Jamie Drummund Smith showing up in his place.
However sector experts warned that landlords would now expect prompt action from Arcadia to repay their faith.
'CVAs are never easy as property owners are being asked to absorb large losses, which impacts the investment that these owners manage, including many of our savings and pensions,' said Melanie Leech, chief executive of the British Property Federation.
'Property owners will now want to see Arcadia’s leadership committed to delivering its turnaround plan to restore the long-term health of the business,' Leech added.
The UK's CVA mechanism allows occupiers to break rental contracts when the survival of their business is at stake. However, each requires support from 75% of creditors, and at least 50% of landlords, with Green needing to pass all seven to save Arcadia, experts said.
Terms included shuttering up to 50 shops, and agreeing rent reductions of between 25% and 50% on just under 200 stores.
Green was forced to sweeten the pill on his orginal offer after an initial shareholder vote was adjourned last week, when it became clear that all seven CVAs would not pass.
According to sources, Arcadia's advisers Deloitte paused the meeting on June 5 before the vote could take place, due to on-the-spot creditor dissent. Green's proposal originally demanded rents to be slashed by 30%-70%, deemed unacceptable by many.
Intu, Arcadia's biggest landlord, was amongst those standing against the motion, alongside Landsecs, Aviva and M&G.
British Land is understood to have backed the deal from the off, after agreeing a reletting concession from Arcadia, should it find alternative tenants for the affected stores in its portfolio.
Arcadia currently occupies 570 stores across the UK. However, charges in recent years that Green has underinvested in the business, which is bloated with 'tired brands' according to analysts, has worsened the outlook. Despite the CVAs passing, the group remains under acute pressure.
Majority Arcadia shareholder and wife of Green Lady Tina Green will finance the amendment, which is expected to cost some £9.5 mln (€10.7 mln) in its first year.