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Creditors up in arms over Shoon CVA

Footwear brands have raised concerns following the announcement that retailer Shoon has entered a Company Voluntary Arrangement, as some are reportedly owed tens of thousands of pounds.

As revealed exclusively by Drapers, the 10-store footwear chain entered into the CVA to ensure the survival of the business, just months after Mark Pinnock bought it from industry veterans Ken Bartle and Peter Phillips with backing from investment firm Tnui Asset Finance.

One footwear brand stocked at Shoon, which is owed a “significant five figure sum”, said it will reconsider working with the retailer.

“CVAs are not good news as it is just a mechanism for closing one company and starting up another with the debts gone or reduced, the poorer leases handed back to the landlords and the best elements carried forward. I suspect we will not be working with them going forward, which will make life difficult for them.”

Another mainstream brand confirmed it it will not work with Shoon going forward.

One women’s footwear brand said: “I’m astonished this has happened so quickly after the investment was made. We are owed money, but not in disastrous proportions, I understand some major suppliers are owed a lot. It will be interesting to see if they get the support of the creditors as it begs the question what are you going to do differently going forward?”

One men’s footwear supplier said: “We are owed a five figure sum. I had my concerns working with them, but we were told the capital had been brought in so there was nothing to worry about.”  

Managing director Pinnock told Drapers the move “will protect the core part of the business, which is healthy”. He said the strategy would involve some store closures but minimal redundancies. There will also be rent concessions affecting the Brighton, Kingston, Reading, St Albans and Tunbridge Wells stores.

Leonard Curtis is overseeing the CVA, which will be voted on by landlords on May 22.

Shoon, which employs 160 people in total, made a pre-tax loss of £1.3m on sales of £8.3m for the year to February 1, 2014, according to the most recent accounts filed at Companies House.

Readers' comments (3)

  • One reason why CVA's happen is that brands are still daft enough to supply a chain or group that owes them lots of money! Stores plan well in advance what they are going to do, so brands shouldn't be so gullible - If you get 'knocked', don't deal with them ever again!

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  • There's a good one the new government could get stuck into.
    Stop it being easy to lose money and then use other people's money to start up again.

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  • Brands, develop some courage and don't supply retailers that pull these tricks and web retailers that regularly discount and degrade your brand equity !

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