A company voluntary arrangement has been approved by the majority of creditors, preventing Coffee Love from going under and safeguarding 200 jobs.
The coffee shop chain has suffered over the last few months due to lower footfall across sites operating in large UK shopping centres, including Westfield and St David’s Centre.
Damian Webb and Philip Sykes from RSM Restructuring Advisory have been appointed joint supervisors and will oversee the process. Reports suggest the proposal includes a rent reduction with landlords.
Webb said in a statement, “The approval of this agreement is good for all parties, it ensures the on-going trading of Love Coffee, protecting over 200 jobs and ensuring a minimum of disruption to the company’s key stakeholders. By securing a consensual restructuring with the Company’s creditors we have avoided other scenarios which would have undermined returns to the Company’s creditors.”
A CVA is an effective restructuring method which allows a business to continue trading while repaying a proportion of debt to creditors, usually over a three to five year period. Often it is the best solution for creditors long-term, as opposed to administration or liquidation, because there can be greater returns.