Stat of the day: £3.5bn

The amount Arcadia and other retailers could lose in a potential lawsuit by their shareholders.

by Elizabeth Anderson
Last Updated: 09 Oct 2013
Retailers may already be facing a miserable year ahead, but it looks like the next few months could be particularly dire for Debenhams and Arcadia. According to the Telegraph, the retailers are facing a lawsuit from current and previous shareholders for losses suffered in the share value of these companies over the past few years, which started with the demerger of Debenhams 14 years ago. The lawsuit will also focus on the sale of Arcadia to Philip Green in 2002.  Law firm Edwin Coe, which is spearheading the legal action, says total losses could reach £3.5bn. Not exactly small change.

The shareholders are particularly disgruntled with the flotation of Debenhams in 2006, three years after it was sold to a private equity firm, as the company's shares have since lost two-thirds of their value. But it's questionable whether they'll be successful, if recent examples are anything to go by - Northern Rock's shareholders are still fighting for compensation and have transferred their case to the EU, after their application taken out three years ago was defeated by the High Court and Appeal Court.

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