A Company Voluntary Arrangement (CVA) to reduce Mamas & Papas’ rent burden has been approved by the struggling retailer’s landlords.
The CVA was approved by 95% of creditors, including its landlords, in a vote this morning, and will involve rent reductions of up to 50% at 30 stores across the nursery and maternity retailer’s store portfolio.
In August Mamas and Papas appointed Deloitte to negotiate an agreement between it and its creditors after warning that it was on the brink of administration. At the time it said that 25 of its stores were “unviable” on present rental levels, and that it could only pay reduced rent on a further 10 stores which were also struggling.
Mamas & Papas chairman David Scacchetti said: “The proposals agreed today not only enable us to cut costs and ensure a profitable retail portfolio but will also create a platform to allow us to continue offering innovative, premium products to customers in the UK and internationally, both in stores and online.”
Mamas and Papas, which is based in Huddersfield, is undergoing a strategic review following the acquisition of a majority stake in the business by private equity form BlueGem Capital Partners in July. As part of this the retailer has also placed some its store-based staff into a consultation process.