Suits You, the menswear retailer owned by Speciality Retail Group, has won backing for its Company Voluntary Arrangement.

Creditors voted in favour of passing the proposals, with 98% voting to support the CVA. 75% of creditors had to approve the CVA in order for it to succeed.

The agreement between SRG - which also operates the Racing Green and Young’s brands - and its creditors saves the business from insolvency.

The struggling 71-store retailer proposed the CVA in order to shed 42 loss-making stores as part of a restructure to save it from collapse, revealed by this month.

The terms of the CVA were deemed to be more favourable than others in the retail sector, with Suits You not wanting to close any stores immediately, unlike the CVAs conducted by JJB Sports and Blacks Leisure last year.

Instead, landlords of the 42 stores have accepted 60% of the full rent for 18 months - equivalent to 11 months rent - during which time the stores will continue trading.

If landlords of affected stores want to take on new tenants during the 18-month period they must give SRG 45 days’ notice.

Richard Fleming, UK head of restructuring at KPMG, which was appointed by SRG to oversee the process, said: “The approval of SRG’s CVA will come as a huge relief to the company and its stakeholders, particularly its 300 staff.  If the creditors had not supported the company’s turnaround plans, it undoubtedly would have faced administration. 

“The company now has a chance to focus its efforts on its successful designer outlet stores and wind down its loss-making high street presence.”

Peter Lucas, chairman of SRG, said: “We are delighted that we have been able to secure the support of landlords in finding a compromise on the business’ lease obligations. The landlords have shown incredible flexibility in voting in favour of our restructuring plans and we are appreciative that they have met us half way in securing SRG’s future. We are also grateful of the support shown by the wider creditor group, particularly our suppliers. While the broader group did not have to make a financial compromise, their 100 per cent support is important. We look forward to a new chapter in the business’ development and we are confident that the CVA will give Suits You a new lease of life.”