Damned if they do, damned if they don't

Reject them, and they’re accused of putting thousands of people out of work. Approve them, and they face a backlash from their solvent tenants who accuse them of subsidising their weaker rivals.

CVAs didn’t get off to a good start with the failure of Stylo’s attempt, but the approval of those by JJB Sports and just yesterday Focus have established them as a palatable option both for retailers in trouble and their landlords.

That has infuriated rivals like Kingfisher chief executive Ian Cheshire, who would love to ditch some of his own stores but given the size and status of his company could never get away with a CVA.

But while Kingfisher or Home Retail, which owns Homebase, couldn’t get away with it, plenty of others could and the danger for landlords is that others will be encouraged by the success of Focus and JJB Sports and a flood of CVAs will follow. Landlords with spiralling void rates will find it hard to reject a proposal which at least keeps the bulk of the stores they let to a particular retailer occipied.

This is when the much proclaimed new customer-focussed approach of the retail property industry really needs to be seen. Just because a company isn’t on its knees, it doesn’t mean that landlords shouldn’t work with them to ensure their property portfolio is meeting the needs of their business, and on terms which are sensible and reflect modern best practice, such as monthly rents.

Landlords are stuck between a rock and a hard place. If they approve a CVA, they need to be sure what they’re backing is a viable business which actually can bounce back. And they also need to remember that good tenants are more valuable than ever in this market — they can’t be taken for granted.