Update: The CVA has been approved by 90% of creditors, therefore it will go ahead. Saville commented, “The level of votes in favour of the CVA, across all of the various creditor groups, demonstrates the strong relationships that the company has with all of its stakeholders and the support that exists for the Store Twenty One business.”
However, it’s been suggested that around 80 stores are at risk of closing in order to help reduce debt. See below for a video on employees’ rights in insolvency situations.
29/6/2016: Reports reveal the high street retailer is proposing to enter a CVA in order to restructure debt, cut rent bills and possibly close several loss-making stores.
As there are currently over 1000 employees across 202 stores in the UK, the CVA move will try and retain as many jobs as possible and avoid going into administration.
The owner, Alok Group, has called in AlixPartners to supervise the CVA process. This type of rescue method is often an effective solution for viable companies as it allows a proportion of debt to be paid back over three to five years. This gives the company breathing space, lets directors remain in control and ensures the business continues running.
Supervisor, Peter Saville, said in a statement, “After careful consideration the directors have taken today’s decisions as these represent the best option in terms of preserving jobs and value within the group.”
“Our focus now is on putting the restructuring plan into action by working closely with the management team and all other stakeholders in order to position the business to succeed in what is clearly an extremely competitive UK retail environment.”
If you are an employee of the business, please listen to the video below as it will tell you your rights as an employee of an insolvent business. There is a link at the end of the video to the Government website which expands further on what you need to know.
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