Retailers duck and dive their way to a new high street

Administration followed by a Company Voluntary Arrangement (CVA) has become the go to strategy for retailers frustrated by landlords’ inflexibility to renegotiate rents and lease terms. And don’t get me started on retail rates which are a fat, milky, uncomplaining cash cow for local authorities.

The status quo is summed up by a recent statement from JD Sports’ CEO, Peter Cowgill, following the ‘reacquisition’ of Go Outdoors after it was placed voluntarily into administration.

“We look forward to having positive conversations with landlords and agreeing new flexible lease contracts, which reflect the widely reported challenges of reduced consumer footfall.”

Hotter goes colder

The news came at the same time as Hotter Shoes announced it will to launch a CVA to reduce its store portfolio from 61 to 15.

The scale of the CVAs is breath-taking. Monsoon Accessorize had 230 stores, but only plans to open 6-10 under a CVA although founder Peter Simon did buy the business out of administration in order to save 100 more stores.

Brands survive. Just

Brands that do not make it through get acquired. Boohoo just spent a measly £5.2m to acquire the Oasis and Warehouse brand names, having bought Karen Millen and Coast last year, all good brands that had fallen foul of falling footfall on the high street and fierce competition on line.

We are certain to see more brands going out of business and being reacquired, principally by retailers with strong on line sales.

The CVA has finally achieved respectability as an essential instrument of change.

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