As chief executive of a successful and very active business with around £2bn to £3bn of retail assets under management, in common with a number of landlords, I am extremely concerned at the government’s lack of action against retailers using the CVA process as a loophole to break binding lease commitments.
Driven by firms of accountants for their own fee income benefit, the CVA process is becoming a daily occurrence that needs to be halted The breaking of legally binding commitments and ‘dumping’ of stores without any recourse makes a complete mockery of the whole legal system when a retailer signs a lease.
What makes it worse is that more often than not these retailers are profitable in their own right, but are using the CVA process to ‘dump’ their less profitable or problematic stores.
Many of the retailers will have taken financial incentives along the way as contributions to fitting out stores and none of this money ever comes back to the landlord.
Chris Geaves, chief executive, Sovereign Centros
There’s nothing voluntary about CVAs for landlords
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CVAs let retailers dump poor stores