"Blacks Leisure plc praises the company voluntary arrangement (CVA) procedure"  

Last year we wrote in September 27th 2009  "outdoor and leisure clothing retailer Blacks Leisure, (Blacks, Millets and Free Spirit) looks likely to propose a CVA to cut costs, close unwanted stores, make 400 redundancies and seek support of its creditors to survive.

Having put one division into pre-pack administration last week, it is now using the more morally acceptable CVA approach to restructure the main business. "

The business in 2010 is now surviving well and has attracted interest from buyers.

In an article in the Independent The chief executive of Blacks Leisure, Neil Gillis, launched a vigorous defence of the insolvency procedure that saved the outdoor retail specialist from collapse last year.  The store was able to shut down 88 poorly performing stores and start to grow again.  Mr Gillis stressed that he was able to compensate landlords some £7.3m for the closures.

 For the 26 weeks to 28 August, Blacks Leisure reduced its first-half pre-tax loss to £8.5m from £15.2m last year, thanks to the CVA and its restructuring measures.

We guess the penny is now starting to drop about company voluntary arrangements and how powerful they are to restructure failing retailers and other viable struggling companies

Last year JJB Sports plc, Stylo plc and Focus DIY plc have all put forward CVA's. Stylo's aggressive plan was rejected however.

The article link below to the Sunday Times is worth a quick read. The author says erroneously that CVA's are used "used mostly by retailers that enables a company to agree with its creditors how its debts should be paid and to close underperforming stores". Any company can use a CVA if it can be a viable business.

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article6850821.ece

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