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Beales department store chain seeks rent cuts from landlords
Department store chain Beales is asking some of its landlords to cut their rents by 70% as it looks to avoid closing some of its branches.
Beales has proposed a company voluntary arrangement which divides its store portfolio into two categories.
For some 24 sites, including 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 Beales engages with landlords to agree the basis of any continued trading from these sites.
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.”
Croxen added 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.
With creditors due to vote on the CVA on 24 March, Beales needs to secure at least 75% creditor approval for the CVA. KPMG will spend the next three weeks in talks with creditors to ensure they understand the full detail of the proposal.