Landlords are confident that a vote in favour of Store Twenty One’s company voluntary arrangement will lead to a turnaround of the company.
After being burned by CVAs such as BHS’s, which have been used to merely postpone an inevitable collapse, landlords to Store Twenty One believe its plans, which include closing almost half its circa 180 stores, will rescue the company.
Mark Robinson, owner of shopping centre asset manager Ellandi, said: “The parent company, Alok Group, has the ability to support the business as a viable model, and on the basis that the CVA would allow them to do this, then there is no reason why we should not support it.
“In the current retail environment, other landlords will be likely to support it too.”
Store Twenty One’s proposals are more similar to the successful CVAs of Travelodge and Mamas & Papas, which secured capital to help improve their businesses.
If Store Twenty One’s CVA is agreed, the value fashion chain would look to close 77 shops. In the meantime, landlords would be paid only 5% of the rent on a quarterly basis.
Any of those 77 shops could be shut in the next three months and landlords given 30 days’ notice.
Around 84 shops will continue to pay monthly rent but will be dealt with on an individual basis to determine whether they will remain trading. Some of these have already begun to close.
Another 17 shops could stay open only if landlords voted to accept 75% of the rent and be paid on a quarterly basis.
Landlords must vote by 14 July ahead of an administration hearing on 11 August.
Restructuring firm Alix Partners is handling the process.
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