Austin Reed Group, which owns Austin Reed, CC and Viyella, is looking to close 31 stores through a Company Voluntary Arrangement.
The company said 22 CC stores and nine Austin Reed stores are “no longer viable” following a strategic review. The group is in discussion with landlords regarding a 50% rent reduction ahead of likely closure in the next six months.
Thirty-five underperforming stores are expected to remain part of the business but will be subject to a 20% rent reduction for 12 months.
The remaining 166 stores, which include the Austin Reed flagship on London’s Regent Street, will be unaffected by the CVA.
The group announced it had appointed Deloitte in December to review the business to secure its long-term future, against “a backdrop of a rapidly changing retail environment and the uncertain economic climate”.
A £3m cash injection will be received from shareholders and the company’s websites will be relaunched to improve the multichannel offering.
Chief executive Nick Hollingworth said: “The actions we are taking will ensure a long-term sustainable future for the brands in the group, and will provide a solid financial platform from which to operate and grow the business.
“The decision to close some stores was not taken lightly but we cannot continue to operate those within our portfolio that are loss-making. We will work closely with the staff within the affected stores to explore redeployment opportunities.”
Neville Kahn, a partner at Deloitte, said: “We consider the proposed CVA 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.”
Creditors and landlords will vote on the proposals on February 5.
The British Property Federation was consulted on the terms of the CVA by Deloitte.