Speciality Retail Group, the menswear retail group which comprises chains Suits You, Racing Green and hire business Young’s, has won backing for its Company Voluntary Arrangement.
Creditors voted in favour of passing the proposals, with 98% voting to support the CVA. 75% of creditors had to approve the CVA in order for it to succeed.
The struggling 71-store retail group proposed the CVA in order to shed 42 loss-making suits You stores as part of a restructure to save it from collapse as revealed by Drapersonline.com.
The terms of the CVA were deemed to be more favourable than others in the retail sector, with SRG not wanting to close any Suits You stores immediately, unlike the CVAs conducted by JJB Sports and Blacks Leisure last year.
Instead, landlords of the 42 stores have accepted 60% of the full rent for 18 months - equivalent to 11 months rent - during which time the stores will continue trading.
If landlords of affected stores want to take on new tenants during the 18-month period they must give SRG 45 days’ notice.
Richard Fleming, UK Head of Restructuring at KPMG and ‘supervisor’ of the CVA said: “The approval of SRG’s CVA will come as a huge relief to the company and its stakeholders, particularly its 300 staff. If the creditors had not supported the company’s turnaround plans, it undoubtedly would have faced administration. The company now has a chance to focus its efforts on its successful designer outlet stores and wind down its loss-making high street presence.”