Beales has filed a company voluntary arrangement (CVA) for 11 of its 29 stores.
Beales in Bournemouth
The department store group said it is seeking a rent reduction of 70% on 11 stores for a period of 10 months while it negotiates with landlords. The other 18 stores – including its flagship in Bournemouth – are unaffected.
Rob Croxen, restructuring partner at KPMG and proposed supervisor of the CVA, said: “Founded in 1881, Beales is a familiar face on the high street of many towns and cities up and down the country. However, in recent years, the profitability of certain stores has been hampered by expensive legacy leases which were agreed many years ago.
“This CVA seeks to strike a balance which provides a fair compromise to the landlords, while allowing the viable part of the business to move forward. It’s particularly important to stress that none of the stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full – something which we know from our work on previous CVAs is of critical importance to landlords.”
Beales also leases offices in Bournemouth and a warehouse in Yeovil, and has a long leasehold on a warehouse in Bolton.
As part of the CVA, the company proposes to pay rents monthly rather than quarterly for three years.
It needs to secure at least 75% creditor approval for the CVA at a vote on March 24.
Drapers understands that the stores affected by the CVA proposals are:
- Bishop Auckland
- King’s Lynn
- Saffron Walden
Beales was at the centre of a power struggle last year, which culminated in property magnate Andrew Perloff, owner of property investment firm Panther Securities, winning control of the business. Perloff made an offer through his investment vehicle, English Rose, in January 2015 that valued Beales at £1.2m.