Twenty One Stores requests insolvency protection via CVA

Budget apparel chain Twenty One Store has shown its card up the sleeve by requesting protection from insolvency in the form of a company voluntary arrangement or CVA. This is the last resort for the company, which has failed to secure a sale or a debt for equity swap.

“We have been working closely with the directors of Store Twenty One for a number of weeks to consider options for the business,” said AlixPartners’ Peter Saville. “After careful consideration the directors have taken today’s decisions as these represent the best option in terms of preserving jobs and value within the group.”

The company has placed its property subsidiaries Bewise and QS into administration, highlights the ‘Guardian’. Other measures about to be put in place are the closure of underperforming stores and the reduction of its physical presence.

Company Voluntary Arrangement, the last resource for twenty One Store

Parent group to the budget fashion chain has thus nominated AlixPartners to take Grabal Alok (UK) Ltd, which trades as Store Twenty One, through a profound reform. Likewise, they have been appointed joint administrators of property subsidiaries Be-Wise and QS PLC within the Store Twenty One Group.

In this regard, "Our focus now is on putting the restructuring plan into action by working closely with the management team and all other stakeholders in order to position the business to succeed in what is clearly an extremely competitive UK retail environment," explain from AlixPartners in a communication issued Wednesday.

Earlier in June, reports broke that the Store Twenty One would fall into administration at a court hearing on August 11 if a solution could not be found for the business.

Twenty One Store has gone through turbulent years in terms of finance given its struggles to adapt to competition such as Primark.

Owned by Indian textiles company Alok Group, Store Twenty One operates 202 stores and employs more than 1,000 people across the UK.

Store Twenty One started in the 1930s as a manufacturing business supplying retailers including Marks & Spencer stores. It then started to open its own stores, going through a rebranding in the 80s.

A decade later, in 1990, it floated on the London Stock Exchange and went on to acquire sister chain Bewise.

Twelve years in and the company was taken private again to be sold to Alok five years later. At that point the retailer was rebranded again as Store Twenty One nearly after a restructuring that involved the closure of 140 shops.

Image from www.twentyonestore.co.uk