Variety discount retailer Poundstretcher has launched a company voluntary arrangement to help restructure its struggling business and appointed KPMG to help drive the turnaround.
The retailer said the CVA was part of a wider turnaround plan that “seeks to restructure Poundstretcher’s UK store portfolio”, stem losses from “underperforming outlets”, shave head office costs and free up capital for investment in “the business’ core estate and product offering”.
KPMG restructuring specialists Will Wright and David Costley-Wood have been nominated to head up the process.
Of Poundstretcher’s 450-store estate, the CVA proposes that a total of 94 stores continue to pay the same rent, 84 stores see reductions of between 30% and 40% over three years, while the remaining 253 stores pay six weeks’ full rent before adopting rents based on each store’s “commercial merits”.
The value retailer needs 75% creditor approval for the CVA to proceed with a vote on the proposal to be taken on July 2.
KPMG’s Wright said: “One of the UK’s best-known discount retailers, Poundstretcher has suffered from significant impacts to profitability on several fronts over a sustained period, which were then further exacerbated by the impact of Covid-19 on footfall.
“With the directors of the business having explored a number of options, this CVA seeks to safeguard the long-term future of the business, across a smaller, more sustainable store estate.”
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