The independent MP, who chairs the work and pensions committee, has written to Green over the proposed financial restructuring of his Arcadia fashion empire that raises doubts about the future funding of the group’s legacy pension funds, which have a deficit of up to £750m.
“When a similarly grim situation arose for BHS pension scheme members, you personally provided funding,” Field said in the letter. “Might I please ask you to offer a guarantee to Arcadia staff that you would do the same for them should the deficit-reduction plan prove insufficient – and this time without the need for the regulator or parliament to step in first?”
Green handed over £363m in cash in 2017 to rescue the BHS pension scheme after months of wrangling with the Pensions Regulator. The deal followed the controversial collapse of the department store chain three years ago, which led to the loss of 11,000 jobs and left a pension deficit estimated at £571m.
Green is trying to push through a company voluntary arrangement (CVA) at Arcadia, which also owns the Topshop, Burton, Dorothy Perkins, Miss Selfridge, Wallis, Evans and Outfit brands. The insolvency procedure enables retailers to jettison loss-making stores and cut rents. The plan seeks to close 23 stores and slash the rents on nearly 200 others and requires the backing of unsecured creditors, who are on the hook for at least 75% of its debts.
The entrepreneur appears to have lost his midas touch with sales and profits down sharply at Arcadia, which has a turnover of £1.8bn. Arcadia was making nearly £220m in underlying profits three years ago but that figure is expected to fall to just £30m in the current financial year.
Arcadia wants to halve payments its legacy pension funds to £25m a year for three years as part of a rescue package announced on Wednesday. Green’s wife, Tina, who is the formal owner of the business, has agreed to top up the pension fund with £100m of extra cash over the next three years to help bridge a deficit that could balloon to about £750m if the company were to go bust.
The CVA requires the backing of the Pensions Regulator, which has already said the former billionaire’s restructuring plan does not adequately protect the group’s 9,500 pension scheme members. The regulator and trustees of two legacy pension funds will be highly influential in the vote as the scheme is Arcadia’s largest unsecured creditor.