Beales’ creditors have voted in favour of the department store group’s company voluntary arrangement (CVA) today, just a day after BHS also gained approval for its CVA proposals.
Beales’ adviser, KPMG, said that 93% of creditors voted in favour of the plan that will reduce rents for 11 of its 29 stores.
“Today’s creditor vote in favour of the CVA proposal will allow Beales to take its first critical step towards turning the business around, tackling head on the issue of onerous legacy leases which have hampered the organisation in recent years,” said Rob Croxen, restructuring partner at KPMG.
“A company can only propose a CVA when the alternative is administration and it must always offer a better return to creditors. In this way, both the creditors and the company are able to fix an underlying business issue without going through a full trading administration – a positive outcome for Beales’ creditors, and good news for customers and employees.”
The department store group, which was founded in 1881, will reduce its rents by 70% on 11 stores for 10 months while it negotiates with landlords. The stores are:
- Bishop Auckland
- King’s Lynn
- Saffron Walden
The other 18 stores – including its flagship in Bournemouth – are unaffected.
Beales also leases offices in Bournemouth and a warehouse in Yeovil, and has a long leasehold on a warehouse in Bolton.
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.