Jigsaw creditors approve store closure plans
Jigsaw, the premium fashion chain, has had its store closure proposals approved by its creditors.
The retailer plans to close 13 of its 74 stores via a CVA with a further 41 being transferred to turnover-based rent contracts. it is understood the plans will result in 200 redundancies.
Those stores facing closure include Westfield London, Bluewater in Kent, Manchester and Birmingham.
The company confirmed its CVA proposal earlier this month, having drafted in KPMG to assess its options. It said at the time it would close between 10 and 20 underperforming or oversized stores.
A spokesperson for the company confirmed: “We are pleased that the proposal has been accepted by the majority of our creditors. The arrangement puts the company on solid footing moving forwards, and allows us to execute our turnaround strategy by refocusing the company on its core business as a women’s British Heritage brand, in what is our 50th year anniversary.”
Will Wright, partner at KPMG and joint supervisor of the CVA added: “The successful CVA proposal ensures that the business is well-placed to trade in the current retail environment, and is an important step in the company’s wider review of its operations.”
There is a growing trend for retailers to seek turnover-based rent deals as footfall has dived post lockdown. AllSaints secured turnover-based rents on the majority of its stores, of which there are 41 in the UK and 42 in the US, via two CVAs, which were approved by UK and US creditors in July.
Meanwhile young fashion chain New Look has approached creditors with a plan to switch the majority of its stores (more than 400) to turnover-based rents, with zero rent on 68 stores, as part of its latest CVA plan.
The New Look proposal has yet to be put to vote for approval but the retailer, and others, has come under fire from the British Property Federation for using CVAs to "rip up" long term leases instead of using them, as is their intended purpose, to provide temporary relief for struggling businesses.