Rescue package drawn up to save 1,800 jobs at fashion chain

A rescue package has been drawn up to save 1,800 jobs at fashion chain Select.

The chain went into administration last week putting 1,800 jobs at risk at its 169 stores across the UK.

The firm, which is aimed at young women, has been struggling despite having struck a deal in April last year that cut rents at its stores.

Select Fashion has at least 20 stores across the North West.

A series of retailers have run into trouble recently as spending patterns change.

Select is owned by Turkish entrepreneur Cafer Mahiroğlu, who himself bought it out of administration in 2008.

Business advisory firm Quantuma has filed proposals for a Company Voluntary Arrangement (CVA).

The company continues to operate its stores supported by its head office and warehouse facilities, plus online trading, and has around 1,800 staff.

Quantuma’s Andrew Andronikou, Brian Burke and Carl Jackson are overseeing the process as joint administrators.

The administrators will continue to operate the business with support from its parent company, as they seek to rescue the business and preserve jobs.

A meeting has been convened for 11 June at which the company’s creditors will vote on the company’s future.

The CVA proposal does not propose the immediate closure of any of Select’s stores and does not propose that any immediate redundancies are made.

Andrew Andronikou, partner at Quantuma, said: “The business experienced a sharp downturn in fortunes at the end of 2018.

“Low levels of consumer confidence, together with Brexit uncertainty and volatile currency, have meant that sales remained subdued in early 2019. The inevitable result was a squeeze on cash flow.

“The turnaround plan embarked upon by the management delivered benefits but had not reached sufficient maturity to protect the business from this impact in the market.

“There remains the opportunity, with the support of its parent company, to bring these to fruition and in doing so return the business to a stable and profitable position.

“As joint administrators, we have arrived at the view that a CVA offers the best outcome for creditors as a whole. The proposal does not outline the immediate closure of any of the company’s stores, and any immediate redundancies, however some may occur even if the proposal is approved.

“If the proposal is not approved, it is anticipated that the company will remain in administration and, in the event a suitable offer is not received to acquire the business, we will have to consider ceasing its trading activities.”

Ion Fletcher, Director of Finance & Commercial Policy, British Property Federation (BPF) said: “These situations are never easy, as property owners need to take into consideration the impact on their investors, including those protecting pensioners’ savings via investment into property, as they vote on the CVA proposal.

“Quantuma and Select engaged with the BPF before launching its CVA proposal. This has provided us an opportunity to improve understanding of property owners’ interests and concerns, but ultimately it will be for individual property owners to decide how they will vote on a CVA.”