Fast fashion women’s retailer Select has won approval to enter into a second CVA process having secured the backing of 87% of its creditors at a vote today.
The company had been placed into administration on 9 May after an initial CVA, launched last year, had failed due to a deterioration of trading towards the end of last year.
Following the administration business advisory firm Quantuma, which had handled the first CVA, filed further CVA proposals in the High Court of Justice on 24 May.
The approval secures the current employment of Select’s 1,800 staff and preserves the operation of its 169 stores, centralised head office and warehouse facilities, Quantuma said.
Andrew Andronikou, joint administrator, said: “The approval of the joint administrator’s proposals gives the best outcome for creditors as a whole. This will mean no immediate closures of the company’s stores, and no immediate redundancies.
“This should provide a platform upon which the company can deliver changes to its operational costs and structures, allowing it to stabilise and move forwards. As widely reported, there are many challenges in the UK retail sector, a factor which has adversely affected the high street. We are therefore pleased with the outcome of today’s meeting and the support displayed by creditors in their acceptance of the proposal, which has resulted in the rescue of the business.”
Select is owned by Turkish entrepreneur Cafer Mahiroglu who bought the business out of administration in 2008.
The approval of its CVA comes on the eve of a crucial vote planned to decide the future of Sir Philip Green’s retail chain Arcadia. Arcadia is seeking approval for six CVAs at a rescheduled creditors’ meeting tomorrow, having pulled the vote at the last minute last week after it failed to secure enough support from landlords.
Sir Philip has subsequently sweetened the deal promising an extra £10m a year to help offset rent reductions but it is understood that shopping centre operator, which controls 15% of the vote, is still planning to reject it. For a CVA to be accepted more than 75% of creditors, by value, have to approve the deal.