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US investor sells Topshop shares back to Sir Philip Green | |
(32 minutes later) | |
US investor Leonard Green has sold its 25% stake in retailers Topshop and Topman (TSTM) back to Sir Philip Green's Arcadia retail empire. | US investor Leonard Green has sold its 25% stake in retailers Topshop and Topman (TSTM) back to Sir Philip Green's Arcadia retail empire. |
There are reports it may now seek a company voluntary arrangement (CVA), allowing it to cut rents and close stores. | There are reports it may now seek a company voluntary arrangement (CVA), allowing it to cut rents and close stores. |
The group also includes brands such as Burton and Miss Selfridge. | The group also includes brands such as Burton and Miss Selfridge. |
In March Arcadia said that job cuts and store closures from any restructuring would not be "significant". | In March Arcadia said that job cuts and store closures from any restructuring would not be "significant". |
Arcadia has 1,170 shops in 36 countries, although the majority are concessions or franchises. | Arcadia has 1,170 shops in 36 countries, although the majority are concessions or franchises. |
It has 300 shops in the UK after shutting 200 of them over the past three years. | It has 300 shops in the UK after shutting 200 of them over the past three years. |
Sir Philip has called in consultants Deloitte to plan a full restructuring of the group after a fall in profits and sales. | Sir Philip has called in consultants Deloitte to plan a full restructuring of the group after a fall in profits and sales. |
Pension negotiations | Pension negotiations |
The sale has also raised hopes it may prompt Sir Philip to repair a hole in the Arcadia pension fund. | |
In 2017 Arcadia agreed to double the pension scheme contributions to £50m per year for 10 years, after it had been revealed that its deficit was running at close to £1bn. | In 2017 Arcadia agreed to double the pension scheme contributions to £50m per year for 10 years, after it had been revealed that its deficit was running at close to £1bn. |
Analysis by the BBC's Business Editor Simon Jack | |
Arcadia is in ongoing discussions with the Pensions Regulator to negotiate a reduction in cash contributions to its pension scheme which is over £500m in deficit. | |
In return for reducing the £50m it pays in each year to make up that shortfall, the company is offering to put company assets into the scheme. | |
Once again, Sir Philip finds himself toe-to-toe with the pensions watchdog. | |
Last time, he ended up writing a personal cheque for £363m to spare 20,000 of his current and former employees falling into the pensions lifeboat scheme - the Pension Protection Fund - which would have seen many losing up to 10% of their retirement benefits. | |
Once again, the Pensions Regulator finds itself in the unenviable position of having to play off competing interests, keeping the sponsor of the pension scheme (Arcadia) on a sustainable business footing while ensuring pension scheme members are protected. | |
Read more of Simon Jack's analysis by clicking here. | |
'Supportive' | |
Leonard Green & Partners (LGP), an American private equity firm with investments in brands such as Lucky Brand Jeans, J Crew and Pure Gym, bought a 25% stake in TSTM, for a reported £350 million in 2012. | Leonard Green & Partners (LGP), an American private equity firm with investments in brands such as Lucky Brand Jeans, J Crew and Pure Gym, bought a 25% stake in TSTM, for a reported £350 million in 2012. |
Investors had hoped the deal would help it expand in the US. | Investors had hoped the deal would help it expand in the US. |
LGP sold the stake in TSTM back to Arcadia for an undisclosed sum and said in a statement: "The transfer simplifies the shareholding structure of Topshop Topman and enables the Arcadia board to focus on the restructuring options being considered. | LGP sold the stake in TSTM back to Arcadia for an undisclosed sum and said in a statement: "The transfer simplifies the shareholding structure of Topshop Topman and enables the Arcadia board to focus on the restructuring options being considered. |
"Leonard Green remains supportive of the business and has the opportunity to repurchase its stake in the future." | "Leonard Green remains supportive of the business and has the opportunity to repurchase its stake in the future." |
Last year Sir Philip was embroiled in claims - strongly denied - of bullying and inappropriate behaviour. | Last year Sir Philip was embroiled in claims - strongly denied - of bullying and inappropriate behaviour. |
He was also criticised over the demise of department store chain BHS, which collapsed in 2016, a year after he sold it for just £1. | He was also criticised over the demise of department store chain BHS, which collapsed in 2016, a year after he sold it for just £1. |