AllSaints launches CVA proposal for UK and US stores
AllSaints has put forward a CVA proposal to its landlords that would see most of its UK and US stores more to turnover-based rent deals.
Some unprofitable stores could be closed but the company said it would be a small number. AllSaints operates 41 stores in the UK and 42 in the US. In total AllSaints trades from 255 stores in 26 countries and employs more than 3,000 people.
The premium fashion chain had been expected to launch a CVA and has appointed Alvarez & Marsal managing directors Richard Fleming and Mark Firmin to oversee the process.
A creditors' vote on the proposals are scheduled for 3 July in the US and 6 July in the UK.
Leases on its US and Canada stores are handled by its AllSaints USA (ASUSA) subsidiary, however since the entity is registered in the UK, it is eligible to participate in a CVA.
In a statement the company said that it had made applications to the US and Canadian courts in order for the CVA to be recognised in both jurisdictions. It said that while landlords in these markets may not be as familiar as those in the UK with the process they would "benefit from a successfully implemented CVA under both UK and US/Canadian law".
AllSaints said that the COVID-19 pandemic and lockdowns have had “a substantial and sudden impact” on the business, which it said had delivered year-on-year revenue growth for five successive years.
While it had taken a number of steps to mitigate the hit from COVID-19, such as accessing government support, maximising online sales, cutting costs and discretionary spend, the future still looked uncertain given the potential impact of social distancing and a "compromise" with creditors was needed.
AllSaints CEO Peter Wood said: “We have taken this step in order to ensure the long-term viability of AllSaints in the face of the unprecedented impact that COVID-19 has had on our business and the wider fashion retail industry.
“The CVAs will allow us to sustain a strong physical retail presence, which in turn will allow us to protect jobs and continue to provide great product and service to our customers.
“Prior to the outbreak of the pandemic we were seeing increased demand for AllSaints in every part of the world in which we operate, and during lockdown we have continued to reach new customers via our online channels.”