Beales’ losses narrowed for the year ended November 1 while turnover was broadly flat, compared with a loss of £1.9m on gross sales of £116m in 2014, as it attempts to slash rent bills on a number of its stores.
The department store chain filed a proposal company voluntary arrangement (CVA) for 11 of its 29 stores on March 7, seeking a rent reduction of 70% on 11 stores for 10 months while it negotiates with landlords. The other 18 stores – including its flagship in Bournemouth – are unaffected.
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.
In CVA documents filed by KPMG, Beales said its new management team has reduced headquarter and operating costs by more than £1m since it took control in April 2015, as well as negotiating improved terms from suppliers and concessionaires. It also stopped trading online in May last year as part of a plan to return the department store group to profitability.
Portnard, which is a company controlled by Andrew Perloff and his family trust, said it will provide an additional £1.8m collateral to Beales’ secured lender when the CVA is approved.
The stores affected by the CVA proposals are:
- Bishop Auckland
- King’s Lynn
- Saffron Walden
It needs to secure at least 75% creditor approval for the CVA at a vote on March 24.