Blue Inc has filed for a company voluntary arrangement (CVA), allowing it to shut unprofitable stores and reduce rents just over a year after going through a pre-pack administration.
Kirstie Provan and Gary Shankland of business recovery firm Begbies Traynor have been appointed as advisors in relation to the proposed CVA.
The struggling high street chain said the CVA forms part of a wider organisational restructuring and the store rationalisation will ensure the future financial stability of the company.
The retailer wants to shut 33 of its 127 shops as part of a rescue plan and reportedly needs £3m of extra capital to pay for more stock and to service its debt.
Blue Inc has already agreed a deal to outsource its warehousing and logistics operations, which it said has saved it £800,000 a year.
Peter Girt, managing director of Blue Inc, said: “In a challenging market it is vital that we ensure our operation runs as effectively and efficiently as possible as we drive the brand to continue to deliver great product, great service and great price. We believe this restructure will allow us to achieve this and protect the interests of our employees, creditors and suppliers.”
Provan, added: “We have been working closely with Blue Inc and consider that the CVA being proposed, alongside the wider operational restructuring process, will protect both the business and significant employment and will enable a platform to deliver long-term profitability. We have discussed the proposal with a number of key stakeholders and have received strong support.”
Administrators from Leonard Curtis were appointed to Blue Inc subsidiary A Levy on 19 January 2016, resulting in the closure of 76 Blue Inc and Officers Club stores and the loss of an estimated 580 jobs. Blue Inc bought parts of the business back that same day, saving 1,500 jobs across its remaining 157 stores.