Austin Reed Group’s creditors have approved the “likely” closure of 31 stores across the UK and other measures outlined in the business’s Company Voluntary Arrangement.
Under the CVA, 22 CC and nine Austin Reed stores, including the two Austin Reed stores in Brent Cross and Bluewater, will receive a 50% reduction in rent with a view to winding up trading after six months.
A further 35 underperforming stores will be subject to a 20% rent reduction for 12 months, after which a consultation will take place to assess their viability.
The large majority of the group’s creditors (95%), including suppliers and landlords, voted to support the CVA.
The group’s remaining 166 stores, including the Austin Reed flagship on London’s Regent Street, will be unaffected.
Shareholders have agreed to inject £3m into the business to support a broader operational restructuring, which will include an improved multichannel offering.
Austin Reed Group business appointed Deloitte at the end of last year to work on a strategic review of the business - including its lease terms - after it made a £1.29m loss in the year to January 31, 2014.
Deloitte partners Neville Kahn and Rob Harding will now oversee the agreed actions. Kahn said: “We are pleased that creditors and landlords have recognised that the CVA proposals put forward offer the best possible solution for the group and all of its stakeholders. We would like to thank the landlords for their support, which has enabled us to achieve this outcome.”