Update: 23/03/2017 - The CVA has been approved by 80% of creditors, according to reports. The supervisors will look to beginning CVA proceedings, which will include rent reductions and closure of under-performing stores.
09/03/2017 - The national menswear retailer has proposed a CVA to its landlords and creditors with the aim to negotiate and reduce the company’s rent bill. Reports reveal the proposal includes a possible 33 out of 127 shop closures if the company were to go into a CVA. According to the Telegraph, rent debt totals £1.8 million.
The fashion chain has been struggling to raise finance to purchase stock with debt levels increasing. Just three years ago the company had big plans to float on the stock market for around £600 million, however it decided to secure private fundraising instead.
A CVA is a formal deal between creditors whereby a proportion of debt is repaid over a set period of time, usually three to five years. It is often a far better outcome than administration or liquidation as creditors see a greater return. In this case, the CVA filing reveals creditors would expect to receive 36p in the pound as opposed to nothing if it went into administration or liquidation.
According to the Telegraph report, the creditors meeting will be held on 22nd March with Begbies Traynor acting as supervisor.
For more information on the CVA mechanism and its benefits, please visit our dedicated CVA section of the site.