Blacks Leisure, the outdoor retail specialist, yesterday unveiled a company voluntary arrangement in an attempt to safeguard its future and 4,300 jobs by ditching unprofitable stores.
The group, which operates the Black and Millets fascias, wants to exit 89 of its underperforming stores – most of which have already closed – and renegotiate rental terms on the remaining 291 stores to monthly payments until June 2011.
A CVA is an insolvency procedure that enables a company to agree with creditors how its debts should be paid and is a less drastic measure than administration. Some 24 of the retailer's stores are outside the CVA.
Blacks Leisure's boardwear shops have been a drag on its performance for some time and in September it appointed KPMG as administrators of its Sandcity subsidiary, which operated 11 loss-making O'Neill stores.
The 89 stores to close comprise of a similar number of Blacks, Millets and Freespirit stores. KPMG said the total compensation being offered to landlords is £7.25m, which equates to about six months' rent. More than 75 per cent of creditors have to approve the CVA; a vote will be held on 23 November.
Two other struggling retailers, JJB Sports and Focus DIY, have also used CVAs to safeguard their future this year. Liz Peace, chief executive of the British Property Federation, said: "While landlords will always want to be as flexible as possible and support their tenants where they can, this does not mean that they should be asked to bear a disproportionate share of the pain."Reuse content