Sixty-eight-store homewares and soft furnishings retailer Textiles Direct has pushed through a CVA in a bid to secure its future by reducing some of its rent bills by 90%.
The terms of the CVA ask landlords of its 20 loss-making stores for rent cuts of 90% for three years and include a request to pay monthly.
It was voted through last Friday, backed by 85% of creditors, to “protect the future” of the north of England retailer, which has suffered poor trading conditions in the past two years. At least 75% of creditors must approve a CVA for it to pass.The retailer said the arrangement saves 400 jobs. A letter to creditors seen by Retail Week says: “If the arrangement is not approved, it is anticipated that the retailer will enter into administration.”
Landlords of five stores voted against the CVA terms and the retailer said those stores were “now at risk” of closure. Discussions with the landlords are ongoing.
Steve Bentley, director of Textiles Direct, which sells bedding and soft furnishings, said: “The sector has suffered and sales have been lower than in previous years.” He said Textiles Direct had expanded into new high street locations on flexible rental terms and the new shops had “offset the losses incurred by some of our other stores, which have relatively high rents”.
British Property Federation senior policy officer James Anderson called the terms of the CVA “clearly inequitable”.