Select owner appoints Quantuma to advise on CVA
Genus UK, which trades as young fashion retailer Select, has appointed recovery and business advisory firm Quantuma to advise on a CVA (Company Voluntary Arrangement).
Select, which operates 183 stores across the UK, has appointed Andrew Andronikou, Andrew Hosking and Carl Jackson of Quantuma to assist its board of directors to formulate proposals for a CVA, which were filed at the High Court of Justice on Monday 26 March.
Select is seeking rent reductions as part of the CVA process (a legal agreement between a company and its creditors which allows it to pay back some of its debt over a period of time) with the option of taking back loss-making sites.
Unlike New Look, which recently gained approval for a CVA which would result in the closure of 60 of its near 600 stores, Select said it will, subject to acceptance of the proposal, continue to operate all of its UK sites. In doing so the company said it should be able to provide stability for employees and landlords while allowing it to secure costs savings through economies of scale and a review of operational costs, to be undertaken outside of the CVA process.
A creditors' meeting has been organised for 13 April at which the company's creditors will be able to vote on the proposal.
Quantuma's Andrew Andronikou said: "The business has suffered as a result of the depressed retail market and escalating rent and rate charges. This inevitably has caused a squeeze on cash flow resulting in a cash burning for a number of years.
“The position for this business, and many businesses of the same model is no longer tenable and has escalated to the present situation where a CVA is considered to be the only option, other than closing it in its entirety."
In the year to June 2016 Genus UK made a loss of £1.5m on sales of £81m and Andronikou said the business had suffered from the loss of anchor tenants from the high streets and shopping centres in which it operates, leading to a reduction in footfall and trade.
“We have carefully considered the formulation of the proposals to present a balanced outcome for both the company and its creditors. We are confident that given the current turmoil in this sector the creditors will support the directors’ proposals and prevent another brand disappearing from our high streets,” Andronikou said.