Ann Summers has become the latest UK fashion business to launch a company voluntary arrangement (CVA) in a bid to move its stores to a turnover-based rent model.
The company said the CVA will only affect the 25 of its 91 stores it was unable to agree revised rent terms for with landlords.
The brand has called in FRP Advisory to oversee the process.
A long list of British fashion companies have launched CVAs in recent months in an effort to mitigate the financial impact of Covid-19, including Moss Bros, Clarks, New Look, AllSaints, Bair Group and Monsoon Accessorize.
“Ann Summers has a bright future but if the business is to fulfil its potential and prosper in the post-Covid trading environment, we need to align our property costs so they reflect the challenges facing today’s high street,” said CEO Jacqueline Gold in a statement.
“I’m grateful to the majority of our landlords who have worked constructively with us to agree sensible terms on the vast majority of our stores, and these landlords will not be affected by the CVA.”
Ann Summers latest brand to seek turnover-based rent model
Additional funding of up to 10 million pounds will also be made available to the brand to continue its turnaround strategy, provided the CVA proposal gets the green light from creditors at a meeting on 23 December.
Gold added: “We continue to invest in our marketing, our product and our brand, and are seeking to protect as many stores and jobs as we can through this process. We have successful and growing Online and Party Plan businesses, and once our store rents are aligned to market levels as a result of this process, we can approach the future with confidence.”
Losses at the company widened from 13 million pounds to 16 million pounds in its most recently reported year.
This latest news comes at the end of what has been a brutal week for British retail, with Sir Philip Green’s high street empire Arcadia falling into administration on Monday, putting 12,000 jobs at risk, while on Tuesday, iconic department store Debenhams announced it would be winding down its business and closing its 124 stores, putting 12,000 jobs at risk.
Photo credit: Ann Summers, Facebook