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  • Insolvency review - Week 15

     

    RCM Weekly review - April 2019 - Week 15

     

     This week: Debenhams enters pre-pack administration, LK Bennett bought out of administration and are Arcadia lining up a CVA?

    12 th April 2019

     Is arcadia lining up a CVA?

    Is retail giant Arcadia, lining up a CVA?

    It is rumoured that Arcadia could soon enter into a company voluntary arrangement (CVA) in order to restructure the business by closing loss making stores and in an attempt to cut costs by negotiating reduced rents with landlords.

    Arcadia Group owns high street retailers including Burton, Dorothy Perkins, Evans, Miss Selfridge, Topman, Topshop & Wallis.

    In recent days Sir Philip Green has bought in two restructuring specialists to sit on the boards of Topshop, Arcadia Group and Taveta Investments (Green’s holding company). Upon the appointment of Jamie Drummond Smith and Peter Bloxham, Arcadia stated “Their relevant expertise will be invaluable as the group works through the current restructuring options. They will also play an important role engaging with the group’s key stakeholders at this critical time for the business.”

     

    12th April 2019

     LK Bennett rescued

    LK Bennett bought out of administration saving 325 jobs.

    LK Bennett has been bought by Byland UK, a company which has been set up by Rebecca Feng, who owns the company's Chinese franchises.

    15 of the retailer's stores are not included in the deal and will close with immediate effect, leading to the loss of 110 jobs. Stores to close: Bath, Belfast, Birmingham, Bridgewater Park Outlet, City Royal Exchange – London, Glasgow, Gloucester, King's Road – London, Knightsbridge – London, Long Acre – London, Northcote Road – London, St Albans, Westgate Oxford, York, York Outlet.

    Ms Feng commented "Under our plan, the business will continue to operate out of the UK, looking to maintain the long-standing and undoubted heritage of the brand. This will be achieved through a combination of working with quality British design, and the business's existing supply chain."

    There had been much interest in taking over the business. Dune the footwear retailer, retail entrepreneur Philip Day, Sports Direct and LK Bennett founder Linda Bennett had been amongst those that had competed with Rebecca Feng to take ownership of the company.

    https://www.retailgazette.co.uk/blog/2019/04/lk-bennett-sold-chinese-franchise-partner/

     

    9th April 2019

     Debenhams enters administration

    Debenhams enters administration

    Debenhams enters administration, as its lenders take control after rejecting financial backing from Sports Direct. TI Consulting has now been appointed as administrators for the chain, which allows Debenhams to continue trading as normal for the immediate future. It’s expected that Debenhams will close 50 of its 165 stores, but no timescale has been announced.

    Debenhams’ chairman Terry Duddy stated "We remain focused on protecting as many stores and jobs as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance. In the meantime, our customers, colleagues, pension holders, suppliers and landlords can be reassured that Debenhams will now be able to move forward on a stable footing. I would like to thank them all for their recent and continuing support.”

    This is a pre-pack administration in which the group’s secured lenders will take full control through a new company, and gives valuable time to reorganise of the business’ retail portfolio and drive efficiencies.

    All existing shares will be cancelled on 10 April, therefore shareholders including sports direct (with a £150m shareholding) will lose all of their equity.

    https://news.sky.com/story/lenders-take-control-as-debenhams-enters-administration-11688630

     

    Could Administration or a CVA rescue your business? If you have questions, we can offer a free, no obligation initial consultation

     

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