KPMG floats Blacks Leisure CVA plan

KPMG has put forward a Company Voluntary Arrangement plan to the landlords of Blacks Leisure Group, the troubled high street retailer.

The firm is brokering the deal for the company which would see Blacks, which runs approximately 392 stores across the UK and Ireland is asking 101 landlords of unoccupied outlets to take a collective £7.25m pay off, equivalent to six months rent.

The move would see the troubled company, which trades primarily as Blacks and Millets, safeguard the remaining 291 outlets and the jobs of more than 4,300 staff.

For the CVA proposal to take effect, 75% of the creditors will need to agree to the terms.

Richard Fleming, UK Head of Restructuring at KPMG, and proposed 'supervisor' of the CVA, said: "The proposed CVA gives Blacks the opportunity to preserve 291 trading stores and around 4,300 jobs.

"We believe the proposed CVA offers a fair balance between the operational needs of Blacks and the landlords’ rights under the tenancy agreements.

"The total compensation being offered to the landlords is £7.25m, which equates to approximately 6 months rent each."

In addition and importantly, given the size of the potential liability, the group will continue to pay rates until the leases are surrendered or forfeited in consultation with landlords.”

The firm said it will be involved in meetings with the landlords to explain the proposal in more detail during the coming weeks.

If endorsed, the CVA will last for around 9 months, the firm added.