Poundstretcher chain served notice by 63 landlords
More than 60 landlords have served Poundstretcher with a notice to vacate shops after the discounter demanded they slash rents in a restructuring programme.
Poundstretcher launched a company voluntary arrangement (CVA) rescue plan in July 2020 to restructure it’s struggling business, demanding rent cuts from hundreds of landlords while switching the whole estate to monthly payments.
The deal carved the estate into categories A, B or C. Landlords in B were told their premises were only viable with rent reductions, while those in C were deemed viable “only if zero rent is paid”. The rent concessions were to be in place for the duration of the CVA, but terms also said it was “not possible to state with any certainty” the length of that process. However, the CVA also gave category B and C landlords the right to terminate the variety discounter’s leases.
The number of landlords to pull the plug on the retailer has been revealed in a one-year CVA progress report filed at Companies House. Since the approval of the CVA, 14 category B landlords and 49 category C landlords have exercised their rights under the CVA requesting the company to vacate the relevant sites.
Poundstretcher has reportedly cut down its store estate by 75 stores since launching a CVA last year.
A wave of retailer CVAs during the pandemic has but the sector at loggerheads with the property industry over the restructuring process. Earlier this year, British Property Federation CEO Melanie Leech wrote to corporate responsibility minister Lord Callanan calling for changes to the UK’s insolvency framework and accusing retailers of using CVAs to disproportionately heap costs onto landlords.
According to BPF figures, 33 retail and hospitality businesses launched CVAs in 2020, compared with 11 in 2019. Retailers to launch CVAs in the pandemic have included Poundstretcher, Caffè Nero and Ann Summers.
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