Select’s company voluntary arrangement (CVA) has been approved by its creditors, resulting in rent cuts of up to 75% for its landlords.
The proposals were given the green light by 94% of its creditors and landlords, who voted on the plans today (13 April).
A CVA process traditionally results in store closures. However, the proposals, as previously seen by Drapers, emphasised that it did not seek closures or redundancies.
Select boss Cafer Mahiroglu told Drapers at the time that the retailer is simply seeking rent reductions, and aims to preserve the employment of all 1,618 store staff and 132 head office employees.
Under the plans, the retailer divided its 183 stores into four categories based on performance.
Owners of 25 of its stores would receive 25% rent, but no rent would be payable to them during a “rent-free period”.
Select would pay 81 landlords 70% of rent owed, and 50% to 27 landlords. Only the chain’s top 50 stores would remain unaffected by the process, although these will switch to monthly payments, rather than quarterly.
Genus UK, which owns fashion chain Select, last month appointed Andrew Andronikou, Andrew Lawrence Hosking and Carl Stuart Jackson of business advisory firm Quantuma to advise on the CVA.
Andronikou said: “The proposal primarily seeks to obtain the approval from a number of the company’s landlords to accept a reduction in rent for some stores with an option to take back loss-making sites, which appears to reflect the current prevailing issues for businesses trading on the high streets.
“The company is committed to protecting employment and following the acceptance of the proposal, will seek to continue to operate all of its UK sites.
“In doing so, this should provide stability to landlords and staff with further costs savings to be achieved via economies of scale and a controlled review of operational costs and structures to be conducted outside of the CVA proposal.
“We look forward to working with the creditors in the near future in order to pay their dividend and are delighted that the acceptance of the proposal should see some 2,000 jobs preserved in the UK retail sector.”