Speciality Retail Group (SRG) whose brands include Suits You has passed the 28-day challenge period from landlords and other creditors for its CVA (company voluntary arrangement).
Richard Fleming, supervisor of the CVA and UK head of restructuring at KPMG, said: “Despite the public criticism of company voluntary arrangements by the landlord community, the ‘Suits You’ CVA, having been unchallenged in the 28 day period, now comes into force.
“To ensure the collaborative approach of previous CVAs is sustained, we worked with the landlords of SRG’s loss-making stores to ensure the terms of the CVA met their needs, while protecting the profitable part of the business from certain administration.
“The March rent quarter date may well prove to be the nail in the coffin for retailers who have not traded well over the past few months. Make no mistake that administration leaves casualties on both sides, with landlords appearing well down the food chain in the creditor group. Working together with tenants offers a much more constructive path for all concerned, not least the employees.
“Indeed a successful CVA, usually part of a wider turnaround programme, has been proven to change the fortunes of a company in a short timeframe. Returning companies to health is in the best interests of all stakeholders.”
The key elements of the success of the SRG CVA included:
-that no stores closed on day one of the CVA;
-that 42 non-profitable stores of a total of 71 will continue to trade and will then close in 18 months time;
-that landlords of non-profitable stores will receive 60% of the full rent for 18 months which equates to 11 months’ rent
The CVA was voted through on 23 February.