Cotswold Outdoor’s parent company Outdoor & Cycle Concepts has launched a CVA proposal in a bid to stem falling profits, Retail Week has learned.
The specialist retailer, whose fascias include Cotswold Outdoor, Runners Need, Cycle Surgery and Snow+Rock, has drafted in Matthew Richards and Alistair Wardel from Grant Thornton LLP to run the CVA.
Documents seen by Retail Week show Outdoor & Cycle Concepts is seeking reduced rents across 50 stores, aims to shut four unprofitable branches within three months and exit a further three stores with immediate effect.
The retailer also wants to shift from quarterly to monthly rent across its remaining estate, as well exit the Republic of Ireland where it operates one store in Dublin.
It is understood Outdoor & Cycle Concepts’ parent company AS Adventures will provide increased funding to the struggling retailer on the condition the CVA proposal is approved.
The move follows widening pre-tax losses at Outdoor & Cycle Concepts. Draft accounts for the year ending December 31, 2018 recorded a pre-tax loss excluding exceptional costs of £13.7m.
The group, which currently operates a 115-strong store estate, has attributed declining profits and sales to low consumer confidence, increased costs and competition, and the withdrawal of credit insurance “from significant numbers of providers”.
In tandem with its CVA proposal, Outdoor & Cycle Concepts is launching a turnaround plan comprising bolstering its board – including the appointment of a new UK chief executive following the exit of former boss Greg Nieuwenhuys last month – cost reductions across the business and enhancing its loyalty scheme, among other initiatives.
A vote on the CVA proposal is scheduled for May 13.
Outdoor & Cycle Concepts managing director Jose Finch said: “We have started to engage with key stakeholders, suppliers and property landlords to explore all options.
“It is vital that we make the right choices that will ensure we create a strong future together. The future of O&CC is in our hands and it will require hard work, commitment, sacrifices and a strong focus on our day-to-day improvements.”
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Cotswold Outdoor owner launches CVA in bid to slash rents