Stylo chairman and chief executive Michael Ziff has outlined plans to shed as many as 200 stores if creditors approve proposals for a Company Voluntary Agreement [CVA] by its Barratts and Priceless chains’ administrator Deloitte.
Ziff told Drapers that ideally he would be looking at a 100-store Barratts chain and an 80- to 100-store Priceless chain. There are a combined 400 stores at present. Stylo’s concession business within the Arcadia-owned womenswear chain Dorothy Perkins will continue to trade. Ziff said: “This is an orderly reconstruction. We would be building on the new store concepts we have opened in Westfield London and Meadowhall in Sheffield.”
Shares in footwear retail group Stylo were suspended earlier this week and five of its trading companies were put into administration as a protectionist measure ahead of a creditor vote on the CVA on February 12.
Suppliers contacted by Drapers were supportive of the proposals, which will see them paid monies owed in full over a 14-month period beginning in June. Stylo said it was also likely to shorten its payment terms on current orders to suppliers to ease pressure on the supply chain if the CVA is approved.
Under the CVA, landlords would be paid 3% of turnover as rent for the first three months from June, followed by 7% of turnover to January 2011.
The CVA needs 75% support to be approved. One supplier said: “It’s business as usual. There are fewer middle-market footwear retailers to sell to now and the consumer doesn’t always want to pay £5 for a pair of boots from primark“>Primark.”
Ziff, son of Stylo founder Arnold Ziff, thanked the industry for its commitment to helping Stylo recover. He added: “Everyone seems committed to helping put this business back on its feet. Our banks Lloyds, Barclays and Prudential and suppliers and landlords have been incredibly supportive.”
Ziff forecast that UK retail sales could be down by between 5% and 10% this year, but said if his plans were approved the business would return to profitability in 2009/10.
The Ziff family owns a combined 65% stake in Stylo. Ziff said the family was “considering all its options”, including possibly buying out the other shareholders and taking the business private if the CVA is approved.