Retail

Matchesfashion to dwindle into administration

in Retail What Does Going Into Administration Mean?

Matchesfashion, the luxury online clothes retailer is to be put into administration by Mike Ashley's Frasers Group.Sky News reports that a number of brands terminated their relationship with the site and the company faced heavy losses, thus the filing of a notice of intention to appoint administrators.Other sources have reported that some of the brands have not been paid for months and that some suppliers were asked for discounts.Along with this, there has been a sharp slowdown noticed across the global luxury goods sector, as the UKs current economic state has left many consumers with less disposable income to put towards such goods.Frasers Group took on the clothing platform not even 3 months ago. It is not clear if control would remain with Frasers in the event of a pre-pack insolvency.Nick Beighton has led the company since 2022. With his leadership the platform saw a steep increase in performance, said to be due to his renewed focus on operational efficiency and effective marketing. It is also unclear if Mr Beighton would continue in his role post-administration.Matchesfashion features more than 500 established and 'new generation' designers, delivering to over 170 countries.Matchesfashion is the second high-profile retailer to be put into administration shortly after being taken over in recent weeks. Earlier this year Aurelius placed the UK chain of The Body Shop into administration.  Why does this happen?  Could it be hubris or do these buyers see more value in the brand name rather than the actual business in the long term.  The brand name is usually retained and sold back to the original owners if the business as a whole is not sold to a third party.Will the clothing platform be brought back to life?

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Matchesfashion to dwindle into administration
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VBites Goes Into Administration

in Retail

22 January 2024 New documents reveal that Heather Mills, business founder of the collapsed VBites, has bought the assets from administrators in a rescue deal worth £1m.Only the plant, machinery, stock, IP and social media was included in the deal. The jobs of the 84 staff (64 retained through the administration and 20 let go at the appointing of administrators) was not included.This being said, Mills is believed to have re-employed about 40 staff which may increase as time goes on. The Peterlee and Corby factories remain operational.  12 December 2023 VBites, the vegan food business founded in 1993 by Heather Mills, ex-wife of Sir Paul McCartney, has gone into administration. The company cited higher energy and raw material costs.As vegan product demand increased, the business acquired Redwood Wholefood in 2009, but growing costs and supply concerns hurt it.Ms. Mills was upset by the failure and thanked her team for their "blood, sweat and tears" over 30 years in the industry."This is extremely distressing for me on a personal level but also for my wonderfully loyal and hard-working staff," stated.She said she had poured "tens of millions of pounds into the business" and given "every solution I feasibly could to keep it going, but sadly mine and my staff's efforts have been thwarted".Heather then went on to heavily criticise the meat industry and social media influencers for putting people off vegan food.Vegan food, which costs more than meat or dairy, has suffered as buyers struggle with rising food prices.Beyond Meat, which sells to McDonald's and supermarkets, reported a 33% drop in sales in August. Heck, the sausage producer, cut its meat-free offerings from eleven to two in May. Pret A Manger closed half its vegetarian and vegan-only stores last year.The Vegan Society estimates 700,000 vegans in the UK, and vegetarians like vegan meals.After VBites finance talks failed, Interpath Advisory appointed administrators on Monday.The company has factories in Peterlee, County Durham, and Corby, Northamptonshire.Interpath Advisory said the company will trade from Peterlee while it seeks a buyer for the business and its assets.It stated that 29 Peterlee staff members were being retained to assist with trading.Twenty-five Corby employees are also working for the joint administrators to process existing orders.The company has laid off 24 workers.James Clark, joint administrator and managing director at Interpath Advisory, said: "VBites is one of the UK's leading manufacturers of vegan food products but unfortunately, and in common with many other companies across the food manufacturing sector, had seen trading impacted by rising commodity and energy prices."

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VBites Goes Into Administration

Smile Direct Club Goes Bust in the US and UK Services Stop

in Retail

Smile Direct Club in the UK closed months after US Parent filed for bankruptcy (Chapter 11) in the US Court.Best known for selling clear aligners remotely, the company claimed it made the "incredibly difficult decision" to close late Friday.US-based dentistry company offered aligners for £1,800 without a dentist appointment. Established in 2014, the orthodontics startup aimed to disrupt the "bricks-and-mortar" dental sector.Traditional dentists and orthodontists or orthodontic therapists fit "train-track" braces and transparent aligners following an in-person consultation.Smile Direct Club's lower prices and home aligner moulds attracted many clients.Company treatment spans four to six months and includes online check-ins with authorised dentists.On its website, the company claims to have "improved more than two million smiles and lives".However it appears that the sheer level of the companies debts thwarted any rescue plan. Customers in the US, UK, and others are confused because the company states its customer service line will no longer be available, even though they may need aligner check-ins or changes.It advises patients to contact a local dentist to continue therapy.It further outraged clients by announcing that its "lifetime smile guarantee" was no longer valid, but payment plan holders must continue paying.It stated refund information will be provided once bankruptcy progresses and "next steps" are established.On its website, Smile Direct Club apologised for the inconvenience.She noted that liquidators will issue reimbursements. "But customers will be at the back of a long queue of creditors so this is unlikely to amount to much, if anything at all," added.She suggested that UK customers who are still waiting for products and have not cancelled or paid by credit card try to seek their money back under Section 75 of the Consumer Credit Act.In late September, Smile Direct Club filed for US Chapter 11 bankruptcy, which gave it time to reorganise its debts or sell pieces of the business.However, a last-ditch rescue arrangement failed on Friday.Attorney Spencer Winters told a bankruptcy court judge that its founders' arrangement to supply funds and buy Smile Direct Club out of bankruptcy failed because its most important lender refused.Despite being valued at $8.9bn (£7bn), Fortune magazine said that it filed for bankruptcy with roughly $900m in debt.

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Smile Direct Club Goes Bust in the US and UK Services Stop

Wilko collapses into Administration

in A guide for redundant employees in administration or insolvency situations News Retail What Does Going Into Administration Mean?

29 September 2023Sky News share today that after seeing some proposals from PwC, it is likely that unsecured creditors will receive between 4p and 8p in the pound, from the collapse of Wilko.According to the proposals, The Pension Protection Fund (£20m owed as a secured creditor), along with Barclays (£2.4m owed) and Hilco UK (£39.9m owed) are expected to be paid in full. The PPF is also owed monies as a unsecured creditor,13th September 2023The Range has purchased Wilko's brand and online assets for a total of £5m it is understood. An announcement is expected by the administrators later.  The Range was under pressure to buy the assets as it faced increased competition from online marketplace OnBuy.12th September 2023The owner of Poundland has agreed to take on the leases of dozens of Wilko shops.Pepco Group, which owns Poundland in the UK, is expected to convert up to 71 Wilko stores to the Poundland brand.11th September 2023Today we here the news that the rescue deal on the cards with HMV owner, Doug Putman, has collapsed. It is expected that now administrators of PwC will strike deals with The Range and Poundland's owner.The Range is likely to purchase Wilko's brand and online assets, whereas Poundland are in talks to buy 100 stores.5th September 2023B&M has bought 51 Wilko shops (locations not disclosed) for £13 million after the discount retailer collapsed into administration.The shops are set to be rebranded as B&M.  The retailer did not acquire Wilko’s brand name or any of its intellectual property. It said it would provide an update on the timing of the new B&M openings in November.Despite this arrangement with B&M, a further 1,332 jobs have been lost. Across 52 Wilko stores, 1,016 redundancies will take place, alongside a loss of 299 roles at two of its distribution centres and 17 at its digital operations department.Conversations with administrators continue.Sky News report more.31st August 2023The latest update to be heard on the situation with Wilko is that OnBuy, the online marketplace, has made a last minute rescue bid for the brand. As reported in the Retail Gazette, it is thought that OnBuy only want to continue trading through Wilko.com.Just earlier on today, it was revealed that a proposed £90m deal from private equity firm, M2 Capital, claiming to retain all employees' roles for two years, whilst it saved Wilko from collapse, had fallen through. The bidder was unable to file the relevant paperwork in time which meant the inability to provide proof of funding.Following this, redundancies will shortly commence, with:269 employees at the retailer's support centre (Worksop) to be made redundant from close of play 4th September 14 employees at Kin Limited to be made redundant from close of play 4th September - this is a subsidiary of Wilko For the two distribution stores in Worksop and Newport, redundancies expected to be announced from next weekJoint administrator Jane Steer said: “It’s with great sadness that we announce these redundancies. We’re incredibly grateful to these team members for the support and dedication they’ve shown to the company, particularly over the last few very difficult weeks. We will continue to do all that we can to support staff through this period of difficult upheaval, and to maximise their opportunities for a rapid return to work. Our priority is to ensure that all team members affected by redundancy are assisted in processing their claims with immediate effect. We will be circulating correspondence to all staff as soon as possible which will outline the support available to complete redundancy payment forms. Advice and assistance will also be available from Job Centre Plus and other agencies.''With this in mind, talks are underway still with HMV owner, Doug Putman and PwC.28th August 2023The latest on Wilko x Administration threat is that Doug Poutman, HMV owner, is in discussion with PwC about offering a finance offer for hundreds of Wilko stores. He seeks a £50m backing to do so. If this falls unsuccessful, a deal with Poundland is likely to go ahead.24th August 2023We hear an update today from the administrators of Wilko. They share that jobs are set to go and stores will close as no buyer has been found for the business as a whole. This being said, some parts of the group could be bought.In a statement, PwC said: "While discussions continue with those interested in buying parts of the business, it's clear that the nature of this interest is not focused on the whole group. Sadly, it is therefore likely that there will be redundancies and store closures in the future and it has today been necessary to update employee representatives.''23rd August 2023Rumours share that Poundland owner,  Pepco Group is in talks with PwC to acquire around 100 Wilko stores. Alongside this, B&M European Value Retail are supposedly negotiating over 40-50 stores. There are then various other value retailers, like TOFS, of whom have lodged offers to acquire smaller parts of Wilko's 400 store strong chain.A more official announcement is expected tomorrow on at least some of the sale agreements.Even with such agreements, there still remains risk of some site closures and job losses.Let's see what is to come...18th August 2023The deadline for interested parties to put forward a rescue deal for Wilko has passed. Administrators weigh up rescue bids. In the meantime,  a secondary sale begins, with discounts on hundreds of products in store.It has been heard that B&M, Poundland, The Range and Home Bargains - all competitors of the homeware retailer, have had interest to submit an offer.Whilst PwC are working on this case, no redundancies have been made. Only time will continue to tell the chains future.14th August 2023Companies vying to buy Wilko have been given until Wednesday 16th August to make an offer for the homewares chain which fell into administration last week.10th August 2023High Street home wear retail chain, Wilko, has collapsed into administration appointing PricewaterhouseCoopers (PwC) as administrators. This leaves 12,000 jobs at risk, as well as the future of many of its 400 stores.With the appointment of PwC, it triggers administrators to run a further administration sale, to see if there are any last minute rescue offers. However, should this not be successful, the 93-year-old chain will close and have its assets sold - making Wilko the biggest casualty of the High Street this year.  If you are an employee, worried about what this means for you, read our guide.Further updates to follow.9th August 2023Wilko has suspended all home deliveries, suggesting a fall into administration is inevitable. Talks with buyers have been underway, but it is thought nothing much will come from them, with the latest updates.8th August 2023 The owner of the Laura Ashley brand, Gordon Brothers, is in talks about a potential rescue deal for Wilko. Insiders say the offer may involve Gordon Brothers providing funding to the retailer to implement a restructuring which would involve a key amount of stores closing and jobs lost.PricewaterhouseCoopers (PwC), which is advising Wilkos', is understood to be seeking binding offers within days, with the company close to running out of cash. Should PwC be appointed as administrator, a further sale process will proceed before embarking on a liquidation of the retailers assets, if no rescue deal comes through.3rd August 2023News today is that Wilko is teetering on the brink of administration, with 12,000 jobs at risk.Despite offers from potential buyers, the needed liquidity to cover the cash pressures being faced, has not been met.Mark Jackson, CEO of Wilko announced the decision to file a notice of intention to appoint administrators. In the meantime, discussions will continue with interested parties in the hope of a late-coming rescue. Watch this space!  A notice of intent gives the company 10 days for a rescue deal to be agreed.  If nothing is forthcoming then it is likely that the company will go into formal administration with the loss of thousands of jobs.27th July 2023It has been reported that Hilco have put in another £5m into Wilko to help with the current cash flow problems.19th June 2023It has reported in the news that landlords of Wilko face the chance of no rental payments for at least the next three years, as a CVA is likely to launch in the next month. The restructuring arrangement looks to cut rents at 240 of its 400 stores, with no stores facing closure.One source close to the process told The Times, that the retailer will soon run out of funds and could collapse into administration if a CVA is not agreed.12th June 2023Wilko has brought in CBRE property advisors to open negotiations with landlords on rent reductions.According to the latest news, Wilko is exploring a Company Voluntary Arrangement, in order to renegotiate rents and potentially close some stores, as part of its cost-cutting plans.PwC advisors are said to have been approached, to look into the various restructuring options possible.Chief executive Mark Jackson remarked: “We’re in the early stages of the turnaround and, as is usual, the directors continue to explore all options for Wilko’s long-term future.”16th February 2023Wilko has announced plans to cut more than 400 jobs, including assistant store managers, retail supervisors, head office managers and call centre workers, in the troubled retailer’s latest effort to control costs.4th January 2023It has been reported that Hilco, the retail turnaround fund, has lent £40m to Wilko to secure its long term future.Wilko has said that it has received a £30m emergency loan to see it through the Christmas trading period. It has already sold its distribution centre for £48m and leased it back. Hopefully this will be enough.In a statement Jerome Saint-Marc, Wilko CEO comments:“Our relationship with our lending partners is solid. The recent sale and leaseback of our distribution centre to DHL earlier this week unlocked £48m which has enabled us to repay our revolving credit facility in full. We’re taking this opportunity, now that the deal is done, to review how we manage our ongoing financing to best trade through the current retail environment while continuing to invest in our future.”Suppliers to Wilko have had their credit insurance withdrawn according to reports. If true, this is a big blow as that now means that suppliers will be reluctant to grant Wilko any credit, so putting serious strain on the retailers finances.Both Retail Week and Retail Gazette have reported that the restructuring advisors Teneo have been instructed by Wilko, the homewares store, to look at how it can turnaround its fortunes. Last month it announced that it was extending its payment terms to 60 days and that anyone due to be paid in September would be paid in November.These are indications that the company is struggling. So what options does the chain have? It has already closed down 15 stores but if it needs to close down many more, that might be subject to long leases, then a company voluntary arrangement is a good way to do this. High rents may not be the issue here but increased competition and a drop in trade as the cost of living crisis bites.

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Wilko collapses into Administration

Linder Myers Solicitors Served Winding Up Petition

in A guide for redundant employees in administration or insolvency situations Retail What Does Going Into Administration Mean?

Update 1 August 2023Linder Myers cases are now being handed by Gordons.  You can contact Gordons LLP directly by calling 0113 227 0385 or emailing metamorph@gordonsllp.com.Hundreds of jobs could be at risk after HMRC issued a winding-up petition against law firm Linder Myers Solicitors.The 100-year-old firm, one of 14 legal brands run by Metamorph Group, has locations in Manchester, Chester, Lytham, York, and Shrewsbury.Three of these names—Linder Myers, Donnelly and Elliott Solicitors in Gosport, and SLC Solicitors in Telford—combine to form MLL Ltd, which was this week served with a petition for winding up.The group is “working hard and in collaboration with HMRC to resolve any outstanding matters in relation to our company MLL” a representative for the group told TheBusinessDesk.com.MLL is currently four months behind on its accounts for the year ending in June 2021.Donnelly and Elliott Solicitors, SLC Solicitors, and Linder Myers Solicitors were combined as part of a reorganisation, which resulted in a £2.1 million deficit for the 18 months ending in June 2020, according to MLL’s most recent filed accounts.The company had more than 300 employees and assets worth £4.5 million at the time, yet its financial statements also had a signed promise from Metamorph Group to offer help for at least a year if necessary.The company stated in the notes to the financial statements that “Covid-19 has had a mixed impact on the group, with some areas such as trusts and probate and family increase in demand for services throughout the period and in other areas, the courts slowing down has reduced our ability to complete cases.“Furlough was used to help manage the financial impact of this situation, which also enabled the retention of key skills and capacity within the business.”In a statement addressing the action taken by its creditor, Tony Stockdale, the founder, CEO and Chair of the group, said, “We are working to resolve matters with HMRC and we are very confident of a successful outcome”.He said the group had “a supportive group of shareholders and management team who remain committed to our strategy”.“That said, the action of HMRC was a shock to everyone. As a result we will be making a number of changes in the business to avoid a repetition.”

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Linder Myers Solicitors Served Winding Up Petition

Le Pain Quotidien enters administration with 250 jobs lost

in A guide for redundant employees in administration or insolvency situations News Retail

Cafe chain, Le Pain Quotidien has fallen into administration, resulting in 250 jobs lost and nine of its ten stores shutting. For details of how an administration affects staff see this page on employees.Stores in Parsons Green, Monument, Royal Festival Hall (Southbank), South Kensington, Covent Garden, Mayfair, Hyde Park, Marylebone High Street and Oxford will be closing. The store to remain open will be that in St Pancras International station. This is the outlet owned by SPQ Holdings Limited, the sister company of Brunchco UK (the trading name of the chain in the UK).Kroll has been brought in to act as administrators.Prior to administration alternative options were explored, which involved a CVA and a sale of the business and its assets. Offers were recieved, but nothing possible to pursue.The Belgian chain has been struggling for some time, with first signs of trouble in the early months of the pandemic. Before the pandemic, 26 UK sites existed. The cost of living crisis and falling footfall in the city, where the majority of outlets are, has been blamed for its failure.Sarah Rayment, global co-head of restructuring at Kroll, said: 'Pressures on parts of the hospitality and casual dining sector have been well highlighted. Brunchco UK Limited which is predominantly located in London has suffered from reduced revenues as a result of decreased footfall in the capital, high rents and increased wage costs. As part of the next steps of the insolvency, we will be looking to realise value from the company's leasehold interests and other assets.'The international operations of the branch are not impacted.

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Le Pain Quotidien enters administration with 250 jobs lost

A landlord’s and tenant’s guide to commercial rent arrears recovery (CRAR)

in Creditor Actions Property and Real Estate Retail

For the better part of 250 years, landlords enjoyed the right to claim ‘distress’ for unpaid rent – meaning that they could seize (distrain) and sell their tenants’ goods to recoup the loss of earnings.The Rent Act 1977 stripped this right from residential landlords1, but commercial landlords continued to be able to exercise distraint until April 2014, when distress laws were replaced with the commercial rent arrears recovery (CRAR) process2, 3. So what exactly is CRAR? Like most archaic UK legislation, distress law was unnecessarily complicated and, many felt, rather unfair. The CRAR rules that supersede them are intended to be simpler and more balanced, with a greater focus on tenants’ rights than their predecessors.CRAR still allows a landlord to collect overdue rent without the need for a court order; however, it applies only to commercial tenancies, and the tenancy must be subject to a written lease. It can only be used to recover rent and any interest and/or VAT payable under the terms of the lease. Landlords: enacting the CRAR procedure Before claiming unpaid rent from a commercial tenant, you must remember the following:The arrears must be at least seven days’ worth or more at the time the notice is served and at the time of enforcement You do not have the right to seize your tenant’s goods yourself; they can only be seized by a certified enforcement agentOnce you have found an authorised enforcement agent, you will need to fill out a Warrant of Control form to enable them to begin enforcement action. The enforcement agent will then take over the process, issuing a seven day notice to your tenant in the first instance.If the rent remains unpaid at the time of enforcement, the agent will enter the property and take control of certain goods located thereon to be sold at public auction. Tenants: your rights under CRAR Firstly, you must remember that a notice of enforcement binds goods to remain on the property, meaning you cannot sell or remove them. You can, however, delay enforcement by applying to court for a delay of execution or a set aside.It is possible to enter a controlled goods agreement in order to repay what you owe over time. Under such an agreement, the goods will remain on the premises, but your landlord’s enforcement agent will be able to remove them if you default on your agreed repayments.If goods are taken, the enforcement agent must provide you with an inventory of everything seized as specified by section 33 of the Taking Control of Goods Regulations 2013.If your lease has expired, your landlord can only use the CRAR process if:the lease ended within the last six months; the lease did not end by forfeiture; the rent was owed by you at the time the lease ended; you still possess some of the goods formerly located on the premises; you occupy the goods under a commercial lease; and your old landlords was, at the time the lease ended, entitled to immediate reversionBeing unable to pay debts, such as commercial rent, when they become due is a warning sign of insolvency. If this described your company’s situation, it is highly recommended that you seek insolvency or turnaround advice from a professional firm.References1. Rent Act 1977, s 147(1)2. Tribunals, Courts and Enforcement Act 2007, s 713. The Taking Control of Goods Regulations 2013, SI 2013/1894

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A landlord’s and tenant’s guide to commercial rent arrears recovery (CRAR)

Administration for major UK wedding dress retailer, David’s Bridal

in A guide for redundant employees in administration or insolvency situations News Retail What Does Going Into Administration Mean?

Just hours after its US owner filed for bankruptcy and David's Bridal UK has filed an intention to go into administration. Andy Pear and Milan Vuceljic of Moorfields Advisory have been put on standby to be  appointed as the administrators working on the case.Across the UK, David's Bridal has 100 employees across its four stores in Watford, London, Brimingham and Glasgow.The retailer, founded in America in 1950, has operated in the UK since 2013, specialising in wedding and occasion dresses and accessories - a name known for many to-be-brides!In a statement, David’s Bridal said: “David’s Bridal stores remain open, and the company intends to continue operating in the ordinary course, including by fulfilling all customer orders without disruption or delay.'' It said it “intends to continue exploring a sale of all or some of its assets”.This is not the first time the retailer has faced difficulty. In 2018 it had filed for bankruptcy. According to CEO of the American parent company, meaningful strides had been taken in recent years to meet customers needs and transform accordingly.“Our business continues to be challenged by the post-Covid environment and uncertain economic conditions, leading us to take this step to identify a buyer who can continue to operate our business going forward. We are determined to stay focused on our future, because we believe we have an important role in ensuring that every bride, no matter her budget, can have her perfect dress.”When analysing the recent history of the UK counterpart, it had warned of a “material uncertainty” about its ability to continue in its 2021 accounts, which were signed off by the board last December. This was because the US parent company had done a deal in November 2022 to create additional liquidity that was dependent on “continuing compliance” with the loan terms.The UK business’s most recent published accounts, for 2021, showed a £170,000 loss on revenues of £4.3m. It last recorded an annual profit in 2018.

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Administration for major UK wedding dress retailer, David’s Bridal

Wild Beer Co Goes Into Administration

in A guide for redundant employees in administration or insolvency situations Hospitality News Retail What Does Going Into Administration Mean?

11 January 2023Wild Beer Co has been rescued from administration in a deal with the Kent-based brewery, Curious.Curious agreed to add Wild Beer Co to its specialist portfolio of premium beers.The acquisition will double the size of the existing Curious operation, based at Ashford, which has a current production capacity of five million pints per year and potential to expand upwards of 15 million pints per year.The Grocer discuss further.8 December 2022After operating for ten years, the Somerset-based brewery that owns a bar in Bristol announced on Monday that it was closing.A statement posted on social media read: "It is with heavy hearts that we regret to inform you that as of today we have entered into a period of administration.''"We would like to thank each and every one of you for your support and love for our brand. It has been a wild ten years and we are heartbroken to be in this position. We could see the potential for Wild Beer and we had ambitions to increase sales and brand exposure. We must sadly report that the company has been facing a number of adverse trading conditions including; Covid, the loss of export sales, spiralling production costs, damaging inflation, and an increase in interest rates that have all affected sales.These factors along with the recent cost of living crisis have impacted the company's ability to succeed."One of the success stories of the craft beer revolution was the 2012 founding of Wild Beer Co.It previously operated a bar in Cheltenham, which closed down in 2019. The business attributed the closure to an increase in competition in the area.Undebt administrators are looking for a potential bidder to buy the company. The group's pub is still open for business as usual at Bristol's Wapping Wharf.

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Wild Beer Co Goes Into Administration

Landlords Settle Case Against New Look’s CVA Before Court of Appeal

in News Property and Real Estate Retail What is a CVA (Company Voluntary Arrangement)?

3 March 2022New Look's landlords have just announced that they have settled with the company on the day before a crucial hearing at the Court of Appeal.17 May 2021New Look Landlords have been granted leave to appeal to the Supreme Court over their treatment in the CVA.Yet again the High Court has upheld the power of the CVA mechanism as a way of ensuring that a company can survive if the majority of its creditors (by value) agree to allow it time to get back on its feet.  Landlords feel that it is unfair but if it is not to be the creditors who else?  A panel of "experts"?  A quango?  The Government?Landlords complained that the switch to turnover rent “fundamentally rewrites” leasing agreements.  Unfortunately, when a company becomes insolvent and, in the case of administration, all contracts are "rewritten".There is a shift in the balance of power between landlords and tenants given the loss of footfall on the High Street and the rise of online shopping recently.  However, if everyone rushes back to the shops, post pandemic, maybe the landlords will be able to take a share on the increased turnover?17 March 2021It has been reported that New Look has entered a High Court battle with two of its landlords; British Land and Land Securities, over its proposed restructuring plans.In total, there were four landlords who challenged the CVA which involved switching stores to turnover based rents.The argument is that switching to turnover rents ‘’fundamentally rewrites’’ leasing agreements and deems the payments of arrears as ‘’unfair’’.10th November 2020New Look announce completion of its refinancing scheme which included a debt-for-equity swap to reduce debt from £500m to £100m and a £40m cash injection.The refinancing scheme was first mentioned in August, at the same time as its (now approved) CVA was first announced.CEO, Nigel Oddy said: “I would like to thank our banks, bondholders, landlords and creditors for their support during our financial recapitalisation process and CVA. Completion of the transaction today means we now have significantly enhanced financial strength and flexibility, and a sustainable platform for future trading and investment. Looking ahead, notwithstanding the challenging market conditions, we are focused on delivering our strategy to enhance our position as a leading convenient broad appeal fashion destination''.2nd November 2020It has been reported that 2 landlords, British Land and Land Securities have challenged New Look's CVA casting doubt on the company's ability to survive.  The new lockdown will hit New Look hard as they only have a small proportion of their sales online (20%). Challenges against CVAs have not been successful in the past.5th September 2020In an unexpected outcome - New Look's creditors have approved its CVA proposals when put to a vote today. Creditors approved with a 75% majority vote in favour.The CVA features no store closures and saves all 11,000+ jobs. It looks to move more than 400 of its UK stores to turnover-based rental models, have an enhanced landlord break clause, and a three-year rent holiday on its 68 remaining stores.14th September 2020British Land, a landlord of New Look, owning 19 of its stores, plans to oppose its CVA proposal laid down to vote on tomorrow. Landsec, of whom own 10 stores also are believed to oppose as are Hammerson.The possibility that New Look's biggest landlords will vote against the plan, does not appear good for the retailer. Its chance of survival is thrown further into red.What will the outcome be tomorrow?6th September 2020It is not looking promising for New Look since around ten of its landlords have been reported to of rejected its CVA proposals, to be voted on by creditors in the next 9 days. Can the table still turn? Or is liquidation coming even more unavoidable now?26th August 2020New Look has announced it has reached an agreement with its financial creditors. This involves investing £40m in new capital and ''significantly de-leveraging'' its balance sheet. The group expect this to be complete on or before 31 October 2020.The company has also announced that it is launching a CVA, so asking landlords to accept new turnover-based leases across its portfolio.The fashion retailer also said it is launching a debt-for-equity swap on its current debts, looking to lower those from £550m to £100m.The British Property Federation have criticised the CVA proposal due to ''inaccuracies''.Drapers report more.10 August 2020According to This is Money, New Look is reported to be considering a company voluntary arrangment (CVA) since it looks to switch to turnover-based rents.Advisors from Deloitte are expected to be appointed as soon as this week.If a CVA is used, this would not be the first time for the company. The retailer used one in 2018 when landlords voted in its favour as it was used to improve the operational performance of the company.01 July 2020It is reported that New Look has given an ultimatum to landlords; trying to reach an agreement to move to turnover-based rents for its 500-strong store estate.Consultancy firm, CBRE, have been hired to help with the process. If discussions with landlords are not successful, likelihood of the retailer falling into a pre-pack administration is high.If a pre-pack is used, this would be the second financial restructuring it has undergone in less than two years, after its debt-for-equity swap with stakeholders in January 2019. At this last restructuring, New Look moved onto monthly rents for most of its portfolio and asked for rent holidays for some of its stores.Talks with landlords have been happening for most of the month though concern rises that some will block the proposal.A pre-pack has been discussed and is ‘’the last thing it wants.’’A spokesperson said, ‘’We are committed to seeking a consensual agreement with landlords to move to turnover rents, and work in partnership with them as we continue to navigate these increbily challenging and uncertain times together.’’The retailer employs 12,000 people across its UK and Ireland business.New Look are not the first to look at a move to turnover rents amid the covid-19 pandemic. Frasers Group are the latest to be looking at doing so. Other retailers have appointed administrators as a result of the pandemic: Debenhams, Laura Ashley, Cath Kidston. Some have also refused to pay March quarterly rents.

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Landlords Settle Case Against New Look’s CVA Before Court of Appeal