Mar 7, 2016
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Beales announces CVA proposal

Mar 7, 2016

Beales, the British department store retailer founded in 1881, is proposing a Company Voluntary Agreement that would see it pay less rent on 14 of its stores.

Rob Croxen, restructuring partner at KPMG and proposed 'supervisor' of the CVA, said: “Founded in 1881, Beales is a familiar face on the high street of many towns and cities up and down the country. However, in recent years, the profitability of certain stores has been hampered by expensive legacy leases which were agreed many years ago.
“This CVA seeks to strike a balance which provides a fair compromise to the landlords, while allowing the viable part of the business to move forward. It’s particularly important to stress that none of the stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full – something which we know from our work on previous CVAs is of critical importance to landlords.”

The retailer has a total of 35 leases across its store portfolio, and also leases offices in Bournemouth and a warehouse in Yeovil, in addition to having a long leasehold on a warehouse in Bolton.

Colin Haig, restructuring partner at KPMG and second proposed supervisor of the CVA, said: “The CVA essentially divides this portfolio into 2 categories. For a total of 24 Category 1 sites, which includes the company’s flagship store in Bournemouth, the leases will be retained at current rents which will be paid monthly as opposed to quarterly for three years. 
“For the remaining 14 leases, it is proposed that a reduced rent, equivalent of 30%, will be paid for a period of ten months, while the company engages with landlords to agree the basis of any continued trading from these sites.”

Beales needs to get at least 75% creditor approval for its CVA and its creditors will vote on the CVA on 24 March 2016. 

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