The group behind the Suits You menswear chain has become the latest retailer to unveil an insolvency procedure to slash its costs and stave off collapse.
The Speciality Retail Group (SRG), which also trades the Racing Green and Young's brands, proposed a Company Voluntary Arrangement to pay 40 per cent less rent on 42 of its 71 stores for the next 18 months, but it requires 75 per cent landlord support.
SRG has hired the accountancy firm KPMG to do the CVA, which would see Suits You, in effect, only paying 11 months rent for the 18-month period. Landlords of the affected stores will only have to give SRG 45 days notice if they find new tenants for the Suits You stores. The creditors' meeting will take place on 23 February.
CVAs have been increasingly used in the retail sector. In 2009, JJB Sports, Focus DIY and Blacks Leisure all used KPMG to implement CVAs but, unlike these, SRG will not close any stores or make any job losses immediately.
The SRG announcement comes at a time when a number of ailing retailers are struggling to keep their financial heads above water, which has not been helped by poor footfall in January resulting from the severe weather.
Suits You will use the CVA to rebalance its store portfolio away from the high street to designer outlet parks, where its shops are performing better.
SRG was acquired by Egyptian supplier Arafa Holding in 2008. But yesterday SRG said that without the CVA, Arafa will "not continue to support the business".
Peter Lucas, the chief executive of SRG, said: "Unfortunately, despite undertaking a thorough operational restructuring of the business in the past year, we have been forced to take more radical steps."
He added: "The combination of refocusing the business on to designers outlets, with a revitalised trading stance, and operational restructuring measures to improve margins and reduce operating costs will make a reorganised Suits You a profitable concern."
On SRG, a British Property Federation spokesman said that maintaining occupancy will benefit high streets and the local community. But he said Blacks had caused "a massive amount of disgruntlement in the industry" with its announcement last month to open new shops in areas it had only recently vacated after the CVA.