Womenswear chain Select explores CVA in latest high street blow
British fashion chain Select is hoping to reach an agreement with its creditors that will allow it to reduce rents in some of its English and Welsh stores.
Like many other fashion brands including East and Joe Bloggs, the womenswear brand has been hit by the ‘depressed retail market’ and rising rent costs. The news comes during a tough period for UK fashion retailers, with many companies struggling to cope with the shift to online shopping and falling sales.
The rescue plan will see Select’s owner Genus UK seek a Company Voluntary Agreement (CVA), which could put the future of a number of stores at risk. The company has 183 stores in England and Wales, and employs almost 2,000 people.
Whilst the business said it has no plans to close stores, landlords will be given the option to “take back loss-making sites" as part of the CVA.
The company is working with business advisory firm Quantuma on the proposal. Andrew Andronikou, partner at Quantuma, commented: "The loss of anchor tenants on high streets and in smaller shopping centres has had a downward spiralling effect on stores such as Select, culminating in a reduction of footfall and therefore custom.
“The position for this business, and many businesses of the same model is no longer tenable and has escalated to the present situation where a CVA is considered to be the only option, other than closing it in its entirety."
Genus UK made a loss of £1.5m in the year to June 2016, with sales of £81m.
New Look is also planning to close 60 stores across the UK in a bid to keep the company afloat. The ‘Beast from the East’ cold snap at the end of February and mid-March has also negatively impacted fashion sales across the UK.
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