Focus chief executive Bill Grimsey has defended Company Voluntary Arrangements in a presentation at the Retail Week Conference.
Grimsey reiterated that Focus, which successfully completed a CVA last year, had been on the verge of collapse before embarking on the CVA process.
Grimsey referred to the CVA approach as a “controversial” one but said: “We were heading into a storm. We asked ourselves; Will we actually survive and will all these creditors get paid if we carry on? The answer was no.
“We’d never have done it unless it was a last resort and in the best interests of our creditors, including the ones we were compromising because they got paid the dividend. In an administration they would have got nothing.”
They added the decision to enter into a CVA was “an easy one” when the “alternative you’re faced with is an administration. And that’s what we were facing”.
Grimsey added that the snow in January had hit Focus “big time” but that overall sales are currently running 2.2% up on budget and EBITDA is running 0.5% up on budget.
But he added: “It’s going to be a tough year. We expect the total DIY market to be flat.”
He also said Focus would be expanding its relationship with Carpetright, which has concessions in eight Focus stores. “We plan to do more and more and more,” he said.
Grimsey also said the retailer would be going after the “growing market” of the aging population. “We’re going to own that territory”, he said.
He added that the new format Genesis stores were performing well and that its value brand Payless, launched last year, is now a £60m brand and represents 12% of sales.