Struggling DIY retailer Focus is considering a company voluntary arrangement (CVA) in a bid to secure its future.
Focus chief executive boss Bill Grimsey has instructed restructuring firm KPMG to prepare a CVA as part of a review of the business, according to The Sunday Times.
Grimsey’s advisers have also agreed in principle with the company’s banks to renew a two-year credit facility, which runs out at the end of this year.
A CVA allows retailers to reduce their debts and interest payments without going into administration, but it requires the consent of at least 75 per cent of creditors. Sports retailer JJB carried out a successful CVA, but other retailers such as Stylo, have failed.
Focus was bought by private equity firm Cerberus in 2007 for £1 for its equity and assumed £225m in debt. Grimsey has carried out drastic cost-cutting measures including slashing the workforce by 700, and cutting the product lines from 18,000 to 12,000. He has also agreed monthly rental payments with some landlords, and lobbied Government on the issue of credit insurance.
The retailer is understood to be ahead of budgeted sales for the past 12 months.