Deloitte to oversee rescue deal at Austin Reed

PARTNERS from Deloitte will oversee rescue proposals at suit chain Austin Reed, under a deal with creditors to save the 115-year old fashion retailer.

Austin Reed Group is set to close 31 stores as part of a company voluntary arrangement (CVA) being negotiated with landlords in which rents would be slashed across 66 of its stores.

Neville Kahn and Rob Harding of Deloitte have been appointed to supervise the rescue deal which would see landlords receive 20% rent on 35 stores for the next 12 months, and 50% less rent on 31 stores which are expected to close after six months.

Under the deal, which includes two CVA proposals for Country Casuals Limited and Austin Reed Limited, 166 stores, representing 72% of the group’s total stores, would continue to trade as normal, including the its flagship Regent Street store.

The CVAs are part of a broader operational restructuring, which includes a £3m investment from the group’s shareholders and further investment in the group’s online offering.

“The proposals to landlords are a necessary step to provide a sustainable platform for the business. As with a number of retailers in the current market, the group has a traditional bricks and mortar portfolio in an increasingly multi-channel environment,” said Kahn.

“We consider the proposed CVAs to be fair and in the best interests of all stakeholders, providing certainty for landlords, and an ongoing future for the business. Early indications show the support of creditors.

“The CVAs purely focus on the group’s real estate portfolio with no proposed compromise of other creditors. During the CVA period the broader group will operate as normal with gift cards and loyalty schemes, as well as pre-payments for orders all being honoured. We believe that the CVAs offer a much better solution for all creditors in comparison to the likely alternative outcomes.”

Detailed CVA proposal documents have been made available to creditors, who are due to vote on whether to accept the proposals on 5 February.

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