​Analysis: Why New Look and Carpetright’s CVAs are working

Carpet and new look 2

Despite their recent surge in popularity for cash-strapped retailers, CVAs are known to be a notoriously unreliable way of saving a business.

Major retailers including BHSToys R Us and Maplin are among the businesses that have collapsed into administration just months after creditors gave the green light to their CVA proposals in recent years.

Against this backdrop, the mechanism, which allows retailers to shut stores and secure rent reductions, has become synonymous for some commentators with little more than a pit stop on the road to eventual demise.

However, New Look and Carpetright, both of which undertook CVAs in 2018, have both done their bit to defy this association. Although the two retailers are in very different markets, their most recent financial updates yesterday struck a remarkably similar tone.

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