Creditors approve Mamas & Papas CVA
MAMAS & Papas has reached agreement with creditors on proposals to safeguard the future of its UK retail arm.
Creditors, including landlords of 60 of its UK stores, voted overwhelmingly to approve a Company Voluntary Arrangement (CVA) at a meeting this morning.
The CVA, which was overseen by Deloitte, relates to Mamas & Papas (Retail) Limited, the company which operates Mamas & Papas’ UK stores. Other companies in the group are unaffected.
Mamas & Papas (Retail) will now continue its constructive dialogue with landlords to implement the CVA proposals, which include plans to reduce rent on certain stores in the UK retail business.
David Scacchetti, chairman of the Huddersfield-headquartered nursery brand, said: “This is an important milestone for us. The proposals agreed today not only enable us to cut costs and ensure a profitable retail portfolio but will also create a platform to allow us to continue offering innovative, premium products to customers in the UK and internationally, both in stores and online.
“I would also like to take this opportunity to thank our creditors for their support during this difficult time. Alongside the recent investment from BlueGem, the strengthened leadership team and the support of our colleagues, we are confident we are taking the steps necessary to protect the Mamas & Papas brand and help it to achieve its future potential.”
The CVA was launched following the conclusion of a strategic review launched earlier this year by the company.
A consultation process with all staff is also under way to improve the operational efficiency of the company and put it in the best possible position for future growth.
The CVA agreement comes a month after experienced retail executive Derek Lovelock was appointed interim CEO.
Daniel Butters and Clare Boardman of Deloitte were appointed as nominees to the CVA proposed by Mamas & Papas last month and now become the supervisors.
Butters said: “The vote in favour of the CVAs enables Mamas & Papas to revise lease terms and proceed with its wider restructuring plan; benefiting creditors, members, employees, suppliers and trade partners alike.
“In addition to securing votes from over 75% of all creditors, for a CVA to be approved a company also needs the support of over 50% of unconnected creditors, of which landlords are the largest group for Mamas & Papas. I am satisfied that the results of the vote represented the best outcome for all stakeholders and will lead to a greater recovery rate for affected landlords.”
