Rescue Plan of Select Likely To Close Stores

Photo by VisitNorwich

The owner of Select, a womenswear chain, has become the most recent high street retailer to opt for a rescue plan that could place the future of some of its stores at risk.

Genus UK operates 183 sites and has 2,000 employees. It will request creditors to agree on a Company Voluntary Arrangement (CVA) allowing the company to reduce the rents in some of its locations.

The company stated that under the CVA, it planned to keep all the shops open. However, the firm said that there would be an option for some of the landlords to “take back loss-making sites,” which would imply closure.

A spokesperson was not able to disclose how many loss-making locations were there which might be at risk of such as fate.

Genus has called in Quantuma, a business advisory firm, to handle the CVA. It will present its plans to its creditors on the 13th of April.

Quantuma stated: “The company is committed to preserving employment and, subject to acceptance of the proposal, will continue operating all of its UK sites.”

A partner at the advisory firm, Andrew Andronikou, stated: “The business has suffered as a result of the depressed retail market and escalating rent and rate charges.

“The position for this business and many businesses of the same model is no longer tenable and has escalated to the present situation where a CVA is considered to be the only option, other than closing it in its entirety.”

Andronikou said that stores such as Select had endured a lack of footfall to smaller shopping centres and high streets where bigger “anchor” tenants had already pulled out.

The said plan comes at a bleak period for the wider high street, with the collapses of Maplin and Toys R Us.

Last week, Next revealed that it had been through its worst year in a quarter of a century, Moss Bros issued a profit warning, and B&Q was struck by a cooling demand for big-ticket items.

A continuing squeeze on the spending of households, as wage growth continues to lag behind inflation, has been perceived as largely to blame.

The recent weather has done little to help, with Ted Baker and Ocado revealing that the sales of the company were blown off course by the “Beast from the East.”

New Look is another fashion retailer which has gone down the route of CVA. Its creditors agreed on a rescue plan last week that will see approximately 60 of its 593 stores close with the loss of a maximum of 980 employees.

Carpetright is also currently considering a similar arrangement. It is thought to likely result in a quarter of the company’s 409 outlets closing.