Historic store chain enters CVA

A RESTRUCTURING specialist has been appointed to help the Beales Department Store Group navigate out of troubled waters following the announcement it has entered into a company voluntary arrangement.

Rob Croxen, KPMG’s restructuring partner, said the profitability of the group founded in 1881, which has stores in Bolton, Kendal, Rochdale and Southport among its 30 branches, has been hampered by expensive legacy leases which were agreed many years ago.

“The CVA seeks to strike a balance which provides a fair compromise to the landlords, while allowing the viable part of the business to move forward,” he said.

“It’s particularly important to stress that none of the stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full – something which we know from our work on previous CVAs is of critical importance to landlords.”
 
Colin Haig, restructuring partner at KPMG and second proposed supervisor of the CVA, added:
“Across its store portfolio, Beales holds a total of 35 leases. The company also leases offices in Bournemouth and a warehouse in Yeovil, in addition to having a long leasehold on a warehouse in Bolton.
 
“The CVA essentially divides this portfolio into 2 categories. For a total of 24 Category 1 sites, which includes the company’s flagship store in Bournemouth, the leases will be retained at current rents which will be paid monthly as opposed to quarterly for three years.
 
“For the remaining 14 leases, it is proposed that a reduced rent, equivalent of 30%, will be paid for a period of ten months, while the company engages with landlords to agree the basis of any continued trading from these sites.”
 
The company needs to secure at least 75% creditor approval for its CVA.