Lingerie retailer Ann Summers is expected to launch a company voluntary arrangement (CVA), which sources indicate could result in rents being slashed or the closure of up to 45 of its stores.
Drapers understands that Ann Summers, which has 106 shops, has hired professional services firm KPMG to pull together a plan for a CVA.
It comes after the retailer hired property firm CWM to discuss options for its retail portfolio and to assist it in negotiating with landlords for lower rents across its store estate.
A source close to the situation said: “Ann Summers has 106 stores – with 45 either facing rent reductions or closure. Advanced preparation is being done by its advisers [KPMG]. A CVA is imminent. It’s a case of when, rather than if.”
Another source said: “Ann Summers is looking to cut rents by approaching landlords and if [landlords] don’t play ball, it will have to serve for a CVA.”
A spokeswoman for Ann Summers said: “As a leading retailer operating in the current retail climate, we are constantly striving to secure the most cost-effective and responsible ways of working. This includes working with a property agent on our existing portfolio as well as new sites that we hope to secure in the near future.
“Ann Summers has absolutely no plans to do a CVA, but given the market conditions and that many stores are over-rented, it makes sense to be having a constructive dialogue with landlords at the present time. To say otherwise is pure speculation and unnecessarily upsetting for our people.’’
Ann Summers reported an operating loss of £3.16 million during the 53 weeks to 30 June 2018, compared with an operating profit of £2.97 million in 2016/17.
It also reported a 5.15% decrease in profits to £66.2m year on year.
Meanwhile, turnover in the period increased by 0.9% from £109m to £110m.
KPMG declined to comment.