There were further stark warnings for retailers and landlords today as the Suits You company voluntary arrangement (CVA) passed through the 28 day challenge period.
Brian Green, supervisor of the CVA and restructuring partner at KPMG, commented: "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 [parent company] 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."
No Suits You stores closed on day one of the CVA and 42 non-profitable stores of a total of 71 continue to trade and will then close in 18 months time. Landlords of non-profitable stores will receive 60% of the full rent for 18 months, equating to 11 months' rent. If landlords wish to take on new tenants, they can do so by giving 45 days' notice.
- Issues surrounding CVAs in property and advice on how to handle them will be discussed at a special Place North West breakfast seminar event on Wednesday 24 March at Old Trafford cricket ground. To attend the event, sponsored by Hill Dickinson and Beever and Struthers, email email@example.com