Focus DIY is thought to be planning to unveil a Company Voluntary Arrangement (CVA) of 38 non-trading stores this week.
Its lenders have agreed in principal to renew its two-year revolving credit facility, on the condition that the retailer can deal with the £12m a year cost of the stores it is paying rent on but not trading from.
These ‘dark stores’ have been closed over the past 18 months as they were loss making. It is thought around 16 of the 38 stores have sub-tenants.
Focus hopes the proposed CVA will allow it to stop paying rent and service charges on the stores. The CVA plan, in part similar to JJB’s successful CVA agreement with creditors, will see lump sum paid out to landlords, equivalent of six months rent, in return for walking away from the stores.
Focus, led by Bill Grimsey, had been seeking advice from KPMG on a strategy for the business.
Unlike Stylo’s proposed CVA, sports retailer JJB’s CVA was approved of by landlords due to it offering some rent for stores it was not trading from.