In another blow for the High Street the owners of Snow + Rock, Outdoor and Cycle Concepts, are looking at closing stores using a Company Voluntary Arrangement (CVA). The company also owns the brands; Cotswold Outdoor, Runners Need, and Cycle Surgery. The private equity owners, behind Outdoor and Cycle Concepts, French based PAI Partners, cited declining footfall on shopping streets as a key reason for its actions.
The group has 114 stores in its portfolio all over the UK. The heavily indebted company’s pre-tax losses have increased from £6.7m to £13.7m for the year ending December 2018, according to Retail World magazine and the company employs 2000 people. Joste Finch, the company’s managing director has said that it has started to engage with the company’s suppliers and landlords to try and save the company. A creditors meeting is due to be held in May with Grant Thornton advising.
So, 2019 is shaping up to be another “year of the CVA” with Debenhams and Arcadia being the next big retailers to look at the insolvency mechanism to reduce their costs. Much has been written about whether CVAs are fair on landlords so please read our review of the debate we held in London last year about the issue.
Finally, remember that CVAs can be used by smaller businesses as well and can be used to exit all onerous contracts not just expensive retail premises.
If you are worried about your job as you work for Outdoor and Cycle Concepts then watch our video on the process below.