29/04/2019.
Arcadia gets HSBC backing for supply chain
HSBC has confirmed that it will step in as a guarantor to secure the supply chain of Arcadia, in a sign of confidence as the retail group negotiates with landlords to restructure its finances. The retailer, owned by Sir Philip Green, must now pay its suppliers in advance after credit insurers withdrew their support earlier this year. Arcadia chief executive Ian Grabiner is currently in talks with landlords in hopes to alleviate some of the group’s cost burdens via a Company Voluntary Arrangement (CVA), with bosses attempting to secure the restructuring deal as soon as next month.
Group battles to secure CVA amid creditor concerns
The news that HSBC will back Arcadia to guarantee supply chain costs comes as a boon for the company as it attempts to persuade its suppliers and other creditors to vote in favour of a CVA proposition. As part of the proposed CVA agreement, landlords have reportedly been offered a 10% stake in Arcadia in return for rent reductions.
Several creditors have nonetheless expressed reservations about accepting the deal, with some fearing that any shareholdings could be rendered worthless if the company ultimately collapses due to market pressures. In addition, landlords have complained that their voting rights regarding the deal are being marginalised due to the amount of money owed to suppliers. In total, the arrangement requires approval from 75% of creditors to pass, with landlords exposed to a financial blow from reduced rental income and terminated lease agreements.
200 stores closed as high street crisis continues
The Arcadia group, which owns high street chains including Topshop, Miss Selfridge, Dorothy Perkins and Wallis, has fallen prey to the same market pressures that have led many major retailers to fold in recent months, as high street businesses struggle to keep up with shifting consumer habits. Rising rent costs have become increasingly untenable for many businesses in the brick-and-mortar retail sector, as low consumer confidence and disruption from the rise of online commerce make a substantial dent in balance sheets.
Faced with challenging market conditions, Arcadia has acted in recent years to cut rent liabilities wherever possible, closing down outlets as leases expire and shuttering more than 200 stores over the past three years. Despite this action, the retail group’s problems have persisted, with the securing of a CVA to enable more store closures and lower rents on existing leases now potentially crucial in order for the business to remain operational.
See my article on what CVAs are.
Are you also at risk of collapsing?
If you are struggling like the above retailer, Arcadia, rather than shutting down, do you realise you may have a hidden source of capital within your business waiting to be activated?
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and underused legislation your business could be due huge amounts in compensation that you didn’t even know about.
That compensation could be the cash rescue your business needed.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cashflow.
Don’t et your bankers control you, contact CPA today.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class commercial credit information that can help you avoid being over extended to commercial customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your business customers.
We regularly publish lists of the latest company insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply to big companies like Arcadia or small ones, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers. Whether your late invoices are owed by businesses or consumers, we can help get you paid.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
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For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
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