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  • Insolvency review - Week 40

     

    RCM Weekly review - October 2019 - Week 40

     

     This week: Prezzo’s Company Voluntary Arrangement (CVA) appears to be bearing fruit as operating losses are halved to £20.7m for 2018 and John Lewis Partnership is the latest retailer looking to reduce rent costs.

    4th October 2019

     John Lewis Partnership is the latest retailer looking to reduce rent costs.

    John Lewis Partnership is the latest retailer looking to reduce rent costs.

    John Lewis Partnership has told landlord that it will withhold 20% of this quarter’s service charge. John Lewis is the latest retailer on the high street to seek rent reductions. Fellow retailers such as Debenhams have successfully negotiated rent reductions of up to 50% through their CVA and House of Fraser, acquired through a prepack administration by Mike Ashley’s Sports Direct have also sought to slash rents.

    On Tuesday John Lewis Partnership launched a ‘Future Partnership’ plan to better integrate the management and running of their two brands, John Lewis & Partners and Waitrose & Partners. The main elements of the “Future Partnership” plan is to organise and manage the Partnership as a single business – not as two separate business units, to create new senior roles with responsibilities that span both brands and to create a smaller Partnership Board.

    John Lewis Partnership Chairman, Sir Charlie Mayfield, said: “Our current structure has served us well in the past, enabling us to develop two of the UK’s most loved and trusted brands. In the last three years we have delivered significant innovation and driven efficiency, maintaining market leading service standards and growing customer numbers. However, the lesson of the last two years is that we need more innovation, faster decision making and bolder steps to align our operating model with our strategy. This is what the ‘Future Partnership’ is all about. Although there will be little or no disruption to our shops or websites in the near term, there will be considerable change in many other areas of the Partnership as we bring the two businesses much closer together. These are necessary and these changes will be difficult for some of our Partners and we will implement as carefully and sensitively as we can. We are confident, as a Board, that when the programme is complete, the Partnership will be better positioned to break out from the cycle of declining returns that are affecting most established retailers. We will be a more modern and more unified business with a leadership team and cost structure that will enable the business to thrive in the long-term.”


    Read more on the Jonn Lewis "Future Partnership plan" here:
    https://www.johnlewispartnership.co.uk/media/press/y2019/accelerating-our-plans-to-deliver-differentiation-and-innovation.html


    2nd October 2019

     Prezzo’s Company Voluntary Arrangement (CVA) appears to be bearing fruit as operating losses are halved to £20.7m for 2018.

    Prezzo’s Company Voluntary Arrangement (CVA) appears to be bearing fruit as operating losses are halved to £20.7m for 2018.

    Prezzo has more than halved its overall operating losses in 2018. The company’s fortunes appear to be headed in the right direction after agreeing a Company Voluntary Arrangement (CVA) in early 2018 that saw the closure of 94 of its restaurants and agreeing rent reductions of up to 50% with its landlords.

    Revenue fell to £157.2m in 2018 and operating losses were halved from £65.6m in 2017 to £29.7m in 2018.

    Karen Jones, executive chairperson said, “Our industry has faced a tough time and Prezzo’s previous strategy of new openings and new concepts distracted from its mission of hospitality. A number of important mitigating actions were taken in 2018 and we’ve started 2019 with a clear plan and in good heart – focused on our people and on our customers, listening to them and serving them better. Our turnaround plan is at an early stage, but I am delighted with the initial results and the positive feedback from our customers and our teams. Our concentration will always be on investing in our teams and ensuring that each customer who walks into a Prezzo has the best possible experience. Only through this will we ensure that every customer leaves wanting to return.”


    Read more here:
    https://www.thecaterer.com/news/prezzo-financial-results-2018


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