High street footwear and accessories retailer Dune has launched a company voluntary arrangement (CVA), following a strategic review of the business.
Founded in 1992 by chief executive Daniel Rubin as a small concession store on London’s iconic Oxford Street, Dune currently operates across 43 stores and 175 concessions and employs around 1,200 people.
In a statement, Dune said that the CVA proposal comes after being “affected significantly” by the impact of lockdown measures on customer footfall across its sites, which it states “has hit footwear retailers particularly hard”.
Dune added: “With the likelihood of future trading continuing to be adversely affected by ongoing restrictions, the company is undertaking a financial and operational restructuring programme which is supported by its existing financial stakeholders with amended banking facilities, conditional on the approval of a CVA.”
If approved, the CVA will see no immediate closures across the store estate but will see several sites move to a turnover-based rent.
Will Wright and Chris Pole from KPMG’s restructuring arm have been appointed as the proposed nominees of the CVA.
Dune confirms company voluntary arrangement following strategic review
Daniel Rubin, founder and chief executive of The Dune Group, said: “Before Covid-19 hit, the business was trading robustly, but the resulting lockdowns have had, and continue to have, a severe financial impact.
“We are profoundly grateful for the support shown by our key stakeholders since the start of the pandemic, but with so much uncertainty still surrounding the outlook for non-essential retail, we’re now in a position where we need to seek additional support if we are to protect our business.
“The CVA provides us with much needed flexibility so that we can emerge on the other side of this crisis in the best shape possible.”
He added: “After 28 years of successfully growing the business, this is not an action that we wished to take. However, although we have seen exceptional growth in our online business, it hasn’t been sufficient to offset the loss of sales from our stores being closed.
“We remain firmly committed to the high street, and indeed, in the longer term, our strategy is to grow our high street presence and adapt our business model with our concessions partners.”
Will Wright, head of regional restructuring at KPMG, said: “While there is increasing hope that restrictions will be eased later in the Spring, the reality is that a number of high street operators have little option but to take urgent steps to address their fixed cost base now if they are to make it through the next few months. The proposals launched by Dune today are no exception, and if approved, would give the Company that vital lifeline to see them through the uncertain weeks and months ahead.”
KPMG added that it will notify all creditors “shortly” of the company regarding the proposal.
Image: courtesy of Dune