Rob Croxen, restructuring partner at KPMG, comments on the CVA proposal for the Beales Department Store group.
For full details of the CVA proposal for J E Beale Public Limited Company and details on how to submit a claim, please visit www.kpmg.com/bealescva.
Commenting on the company voluntary arrangement (CVA) proposal in today's announcement by the Beales Department Store group, Rob Croxen, restructuring partner at KPMG and proposed 'supervisor' of the CVA, said:
“Founded in 1881, Beales is a familiar face on the high street of many towns and cities up and down the country. However, in recent years, the profitability of certain stores has been hampered by expensive legacy leases which were agreed many years ago.
“This CVA seeks to strike a balance which provides a fair compromise to the landlords, while allowing the viable part of the business to move forward. It’s particularly important to stress that none of the stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full – something which we know from our work on previous CVAs is of critical importance to landlords.”
Colin Haig, restructuring partner at KPMG and second proposed supervisor of the CVA, added:
“Across its store portfolio, Beales holds a total of 35 leases. The company also leases offices in Bournemouth and a warehouse in Yeovil, in addition to having a long leasehold on a warehouse in Bolton.
“The CVA essentially divides this portfolio into 2 categories. For a total of 24 Category 1 sites, which includes the company’s flagship store in Bournemouth, the leases will be retained at current rents which will be paid monthly as opposed to quarterly for three years.
“For the remaining 14 leases, it is proposed that a reduced rent, equivalent of 30%, will be paid for a period of ten months, while the company engages with landlords to agree the basis of any continued trading from these sites.”
The company needs to secure at least 75% creditor approval for its CVA. A detailed proposal document is expected to be made available to Beales creditors via a dedicated website today. The creditors will vote on the CVA on 24 March 2016. KPMG will spend the next three weeks in talks with creditors to ensure they understand the full detail of the proposal.
Notes to editors:
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About company voluntary arrangements (CVAs)
Where a company is experiencing difficulties in paying its debts, the directors can propose a company voluntary arrangement (CVA) whereby the company enters into a legally binding agreement with its creditors, such as their suppliers or landlords. In a similar vein to an individual voluntary arrangement (IVA), which gives an individual an alternative to bankruptcy, a CVA enables a company and its creditors to come to a compromise agreement and avoid an administration or liquidation. A CVA can provide a company with some breathing space to allow it to reorganise or restructure its funding and/or its operations with as little disruption to the day to day trading as possible, with the control of the company usually staying within the existing management.
Beales was founded in 1881 and has 29 department stores across the country. It was returned to private ownership in April 2015, when it was acquired by Andrew Perloff and his family interests.
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