Lingerie retailer Ann Summers is a mooting a Company Voluntary Arrangement (CVA), a move that can help companies shut stores or get rent cuts.
The family-owned company, which has 90 UK branches, said it is has seen a significant shift in sales from stores to online since the onset of the pandemic, and it expects the trend to continue.
A company spokesman said: “We have had constructive conversations with many of our landlords to ensure our rental costs are appropriate for the new market conditions. However this has not been the case with all landlords which is why we are considering a CVA, which would only affect those stores where we have been unable to agree new terms.”
The potential restructure plan was revealed in a column by Ann Summers’ chief executive Jacqueline Gold in Retail Week.
Gold in Retail Week said: “We want to work in partnership with our landlords and our interests should be aligned. That’s why we, like many retailers, think turnover-based rents are the way forward. It’s no coincidence that outlet centres and travel retail have been two of the few success stories in bricks and mortar retail in recent years, and these are the places where turnover rents are the norm.”
The boss added: “We recognize that our landlords are businesses too and we understand they will need a return. I’m pleased to say the majority of ours are sensible and have been open to negotiations.”
However, there are some who haven’t and who continue to bury their heads in the sand when it comes to these discussions. And the way the system is set up, if they won’t come to the table, the only way a retailer is able to resolve the situation is to undertake a CVA.”
Gold also said: “Whatever the outcome, Ann Summers has a bright future. We believe in stores, as a key part of our offer alongside our ever-improving online channel and our unique and rapidly growing direct selling business. And we don’t want to lose brilliant colleagues. But it needs everyone to do their bit, including landlords. Otherwise there will be many more of us forced to go down the CVA path.”
Non-essential retailers closed shops in March for the Covid-19 lockdown and were able to start reopening them in England from June 15.