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14 Feb 2011
KPMG IS UNDERSTOOD to be assisting sports retailer JJB with its second company voluntary arrangement (CVA), in less than two years.
JJB entered into a CVA in April 2009, having gained the backing of 99.9% of creditors. KPMG partner Richard Fleming spearheaded the agreement, which closed 140 stores and changed rental payments to monthly from quarterly on the remaining 250.
Further reading
CVAs usually repay a portion of debt owed to creditors - including landlords - over a period of time, while allowing the business to continue trading. A CVA must be voted for by 75% or more, by value, of creditors to be pushed through.
Under the new CVA proposals at JJB, it will close 45 stores, and 50 will be under review for closure over the next two years.
A statement by the company said: "The board has decided that the group's future viability is dependent upon the successful implementation of a company voluntary arrangement involving the compromise and release of certain liabilities owed by the group to its landlords."
The full CVA proposal will be sent out to creditors at the end of the month.
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CVA
The fact that a second CVA is needed less that 2 years after the first CVA was approved goes to underline the difficult trading conditions in the retail sector but does raise the question as to whether the first CVA “cut deep enough”
Posted by: Robert Moore - KSA Group, 15 Feb 2011 | 12:36