LONDON, June 7 (Reuters) - British lawmakers have raised concerns over the funding of the pension deficit of Philip Green’s Arcadia fashion group, which is fighting for its survival.
Creditors are due to vote next week on Green’s restructuring plan for Arcadia, which consists of seven Company Voluntary Arrangements (CVAs) that will close stores, cut rents and make changes to the funding of the group’s pension deficit.
Arcadia owns the Topshop, Topman, Burton Menswear, Dorothy Perkins, Evans, Miss Selfridge and Wallis brands.
The British parliament’s Work and Pensions Committee said on Friday that its chair Frank Field had written to The Pensions Regulator (TPR) with detailed questions about the section of Green’s CVA plans that cover funding for the pension deficit of Arcadia.
The committee said it wants to avoid a repeat of pension deficits seen at department store chain BHS, when it collapsed in 2016 a year after Green sold it for a nominal sum of one pound.
Field said that at the most recent publicly available update, the deficit in the Arcadia schemes was between 537 million and 727 million pounds ($682 million-$924 million).
Green needs his restructuring proposals for each of Arcadia’s brands to be approved by creditors, including landlords, or the group, which employs 18,000, will likely be placed into administration.
On Wednesday a key meeting of creditors held to vote on Green’s plan to restructure the group was adjourned until June 12 after several landlords declined to back the plan.
“On the face of it, there would seem to be a substantial deficit remaining in the pension schemes,” said Field.
“You will understand that, given our experience with BHS, we are very keen indeed not to see a repeat of the mistakes of the past.
“We recognise that the best support for any pension scheme is a trading employer, and that you are alert to the risk of insolvency. Nevertheless, the adjournment of this week’s meeting is a useful opportunity for us all to reflect on the CVA proposals.”
After BHS went bust, Green fought a battle with the pensions regulator before finally agreeing to pay 363 million pounds to plug a hole in the retailer’s pension schemes.
$1 = 0.7872 pounds Reporting by James Davey, editing by David Milliken and Susan Fenton