Fast fashion retailer Select has achieved unanimous support for its proposed CVA (Company Voluntary Arrangement) from its creditors.
Under the terms of the arrangement, which was approved by 94% of creditors at a central London meeting this morning, the company is not looking to close any stores but to seek rent reductions from its landlords and to carry out a number of other cost savings.
The company operates 183 stores across the UK supported by centralised head office and warehouse facilities, and also trades online. Its clothing, which comprises 4,000 items, is aimed at 18-34 year old women.
Select, which employs 2,000 staff, filed its proposals for a CVA at the high court last month and appointed advisers Quantuma to oversee the process, which said the business had been hit by the prevailing tough trading conditions on the high street.
“The proposal primarily seeks to obtain the approval from a number of the company’s landlords to accept a reduction in rent for some stores with an option to take back loss-making sites, which appears to reflect the current prevailing issues for businesses trading on the high streets,” said Quatuma partner Andrew Andronikou.
“The company is committed to protecting employment and following the acceptance of the proposal, will seek to continue to operate all of its UK sites. In doing so, this should provide stability to landlords and staff with further costs savings to be achieved via economies of scale and a controlled review of operational costs and structures to be conducted outside of the CVA proposal,” Andronikou added.
Select’s CVA follows on from that of New Look, which has also used such an arrangement (which enables companies to repay a certain amount to its creditors over a period of time) to secure rent reductions on a number of sites. However New Look is also seeking to close 60 stores as part of the process.
Struggling maternity and children’s retailer Mothercare is also said to be exploring the possibility of proposing a CVA to help it weather tough trading conditions.