Value fashion retailer Store Twenty One is looking to close 82 stores after creditors voted in favour of its company voluntary arrangement (CVA), Drapers understands.
The closures would take its total retail footprint from 202 to 120 stores.
The CVA proposals were approved at a meeting on Friday (July 15) after 86% of creditors voted in favour, sources told Drapers.
Grabal Alok (UK), which trades as Store Twenty One, appointed AlixPartners as nominees for its CVA on June 28. At the same time, administrators were appointed to its property subsidiaries, Be-Wise and QS.
A spokeswoman from AlixPartners said: “The CVA has been approved with the support of almost 90% of creditors.”
However, she could not confirm how many stores will close: “It is too early to go into specific details regarding the revised shape of the business, as this depends on the outcome of discussions with the various stakeholders.”
James Keates, restructuring partner at Shoosmiths, which advised Store Twenty One, said the deal would save “more than a thousand jobs”.
The decision to launch a CVA followed an in depth review of Store Twenty One’s operating model and an analysis of the restructuring options available to it.
AlixPartners said the CVA would help the business to “remain competitive in today’s challenging retail environment”: “[The aim is to] rationalise the company’s leasehold and operational obligations and restore the viability of the company’s business and balance sheet, to assist in a return to profitability.”
The news is another blow to the high street, which is still reeling from the demise of BHS and Austin Reed.
As previously reported by Drapers, weak locations could hamper deals to sell Store Twenty One sites, according to research by analysts the Local Data Company.
However a source close to the situation told Drapers value retailer Pep&Co may pick up some of the Store Twenty One units.
“They put the CVA down to the tough trading environment but Store Twenty One has too many shops and the product isn’t right,” he added. “The guys running it are old school and it just didn’t move with the times. It will be very difficult to turn that business around.
”Pep&Co might take a few stores in smaller neighbourhood towns, as it is a similar family value business.”
Pravin Soni, director of Store Twenty One, said: “We would like to thank all of our employees, creditors and other stakeholders for their support, in what we know has been a very difficult time. The directors and management team now look forward to focussing on the future of Store Twenty One and working with everyone to make this business a success for many years to come.”