Global contemporary fashion retailer AllSaints, headquartered in East London, has launched a CVAs (Company Voluntary Arrangements) proposal for its store portfolio in the UK and in the US.
The fashion retailer is putting forward a proposal to its landlords that will see most of its 41 stores in the UK and 42 stores in North America move to turnover-rent (also known as percentage rent). The company said that the CVA proposal will effectively align landlords with the group’s recovery and will protect the group against the further risk of retail closure. ”A small number of stores will close where business is not feasible,” added in a statement.
AllSaints will restructure its store portfolio through CVAs in both All Saints Retail Limited (ASRL) and its subsidiary AllSaints USA Limited (ASUSA). Creditors will vote on the proposal at meetings on 3 July 2020 (ASUSA) and 6 July 2020 (ASRL).
AllSaints’ leases on its stores in the US and Canada are held in its ASUSA subsidiary. However, this subsidiary is a UK registered and managed company, and as such is able to participate in the CVA process.
AllSaints said the closure of the vast majority of the group’s retail estate around the world as a result of the pandemic has inevitably had a substantial and sudden impact on its short-term sales. ”AllSaints took immediate actions to mitigate the impact and reduce costs, including a range of measures to maximise online sales, as well as halting all discretionary spend and using Government support where possible.”
”A compromise with the Group’s creditors, via the CVAs, is now required to ensure the viability of AllSaints’ business. This will enable the Group to sustain a strong physical retail presence, which in turn will allow it to protect jobs and continue to serve its customers,” stated the retailer.
“We have taken this step in order to ensure the long-term viability of AllSaints in the face of the unprecedented impact that COVID-19 has had on our business and the wider fashion retail industry. The CVAs will allow us to sustain a strong physical retail presence, which in turn will allow us to protect jobs and continue to provide great product and service to our customers. Prior to the outbreak of the pandemic, we were seeing increased demand for AllSaints in every part of the world in which we operate, and during the lockdown, we have continued to reach new customers via our online channels. The commitment of our global team and the support of our vendors has been fantastic throughout this exceptionally challenging period. As a result, despite the sudden and adverse impact that COVID-19 has had on our sales and our short-term outlook, we remain confident in the long-term prospects for our brand,” said Peter Wood, CEO of AllSaints.
AllSaints operates 255 stores across 26 countries with over 3000 employees and was founded in 1994, and owned by consumer-focused private equity investor, Lion Capital since 2011.
AllSaints is being represented by Kirkland & Ellis International in the U.K, Kirkland & Ellis LLP in the US, and Blake, Cassels & Grayson LLP in Canada. The CVA nominees are Richard Fleming and Mark Firmin of Alvarez and Marsal.
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