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Select expected to be placed into administration this week

Lauretta Roberts
07 May 2019

Fast fashion retailer Select is to be placed into be placed into administration this week, six weeks after it filed its intention to appoint an administrator.

The chain had been trading under a CVA (Company Voluntary Arrangement) for the past year in an attempt to cut costs, including the rent across its 180-strong store estate.

Business advisory firm Quantuma has been lined up to handle the process, which places 2,000 jobs at risk. Partner at Quantuma, Andrew Andronikou, has confirmed the administration will take place within the next 48 hours.

Select is headed up by Turkish entrepreneur Cafer Mahiroğlu, who bought the business out of administration in 2008. Mahiroğlu's family firm Özdemir Üç Tekstil owns the retailer along with factories across Turkey, Romania and Vietnam.

The administration comes at a sensitive time for fellow high street chain Arcadia – Sir Philip Green's Topshop to Burton fashion empire – which is attempting to convince creditors and, in particular its landlords, to back its CVA plans.

In order to sweeten the deal Sir Philip has pledged to invest £100m in the chain, via a loan, and has also offered landlords a stake in the business which can be realised in the event of a sale. He has also pledged the freehold of the Oxford Circus flagship store of Topshop to the company's pension fund.

Despite this landlords are reluctant to wave though the CVA given the number in play on the high street at present (for instance at New Look and Mothercare). The process – which enables companies to pay back a proportion of their debt over an agreed period of time, as well as cut costs via store closures and rent reductions – can often fail, as in the case of Select and retailers end up going down in any case.

Shopping mall operator Intu announced on Friday that it expected its income to be hit this year due to a growing number of CVAs.

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