Ann Summers CVA "likely" but not certain as some landlords remain reluctant to adjust terms
Ann Summers has begun talks with the British Property Federation (BPF), a move that will likely lead to the launch of a CVA after failing to negotiate better rental terms with some landlords.
The lingerie retailer said while over half of the landlords across its 90-strong store estate have agreed to change to turnover-based rents, a couple have been reluctant to adjust their terms.
Although a CVA is now likely, Ann Summers said it remained uncertain and depended on whether the remaining landlords agreed to change to turnover-based rents in the coming weeks.
If the CVA does go ahead, it would only apply to the retailer's stores where landlords have not agreed to turnover-based rents.
The news follows as Ann Summers reported a 14.4% increase in sales in the quarter ending 26 September.
The retailer added that a lower rental cost base was “critical to ensuring that Ann Summers’ lease portfolio is sustainable in the medium to long term and that our rental outgoings reflect consumer footfall due to the Covid-19 pandemic and an overall shift towards online shopping.”
Ann Summers CEO, Jacqueline Gold said: “Despite all the challenges of the pandemic, our turnaround plan is progressing well and alongside our successful online and direct selling businesses, we believe our stores have a significant role to play in our future plans."
“However, in order to ensure the business’s stability and to protect as many stores and jobs as possible, it is likely we are going to proceed with a CVA to address property costs – both rent and future business rates – which are no longer appropriate in the post-Covid world."
“I hope that we can count on the support of our landlords and their industry representatives as we embark on this process.”