Administrators for Select launch bid to rescue business
Administrators for the Select fashion chain have filed proposals for a Company Voluntary Arrangement as they look to cut property costs for the business.
A meeting has been convened for 11 June at which Select’s creditors, including landlords, will vote on the company’s future. The CVA proposal does not propose the immediate closure of any of Select’s stores or that any immediate redundancies are made, although redundancies could still happen even if the proposal is approved.
In the meantime, joint administrators Andrew Andronikou, Brian Burke and Carl Jackson of Quantuma are continuing to operate Select with support from its parent company as they seek to rescue the business and preserve jobs.
Select entered administration earlier this month following poor sales. With 1,800 employees, the company has 169 stores across the UK together with a head office and warehouse facilities.
Andronikou said: “The business experienced a sharp downturn in fortunes at the end of 2018. Low levels of consumer confidence, together with Brexit uncertainty and volatile currency, have meant that sales remained subdued in early 2019. The inevitable result was a squeeze on cash flow.
“The turnaround plan embarked upon by the management delivered benefits but had not reached sufficient maturity to protect the business from this impact in the market. There remains the opportunity, with the support of its parent company, to bring these to fruition and in doing so return the business to a stable and profitable position.”
If the proposal is not approved, the company is expected to remain in administration. In addition, if no suitable offer is received for the business, the administrators will consider ceasing its trading activities.
Ion Fletcher, director of finance and commercial policy at the British Property Federation,said: “These situations are never easy, as property owners need to take into consideration the impact on their investors, including those protecting pensioners’ savings via investment into property, as they vote on the CVA proposal.
“Quantuma and Select engaged with the BPF before launching its CVA proposal. This has provided us an opportunity to improve understanding of property owners’ interests and concerns, but ultimately it will be for individual property owners to decide how they will vote on a CVA.”
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