Retailer upbeat on future as it brushes off CVA rumours
Retailer Claire’s Accessories is continuing to look for growth opportunities just weeks after it was forced to deny that it was planning to enter into a Company Voluntary Arrangement (CVA) and close stores.
In its annual accounts signed off last week, which responded to its American parent company’s Chapter 11 process, the Erdington-headquartered business said it will continue to open new sites when suitable locations are found.
The retailer saw pre-tax profits fall by £5m to £2.7m despite sales rising 9% to £138.7m in the 53 weeks to February 2018, compared with the 52-week 2017 financial year.
It closed seven of its “under performing” stores and a further 31 concessions, while opening only six concessions.
This was drive by a realignment of its concession partner network to “ensure that the company continues to meet its long term strategic objectives”.
The company said: “When we choose to close a store it is generally because the store has negative or marginally positive cash flow or the store’s anticipated future performance or lease renewal terms do not meet the company’s criteria.
“We also plan to continue opening stores when suitable locations are found and satisfactory lease negotiations are concluded.”
At the end of the financial year Claire’s Accessories operated 371 stores and 98 concessions.
It added: “We will continue to pursue new partners with a view to expanding our concession store-in-stores base in the UK.”
Last month, it was reported that the company was working with a restructuring firm to shed sites and gain rent reductions, days after Claire’s US parent company emerged from bankruptcy protection.
The bankruptcy protection procedure in the US – known as Chapter 11 – is aimed at giving companies time to restructure their finances.
As a result of the process, group chief executive Ron Marshall said the firm was now “a healthier, more profitable company”.
He added: “We have no plans for either a CVA or major store closures in the UK in the foreseeable future.”
Claire’s Accessories UK said in its recently filed Companies House report: “Claire’s international subsidiaries are not part of the United States Chapter 11 filings.
It stressed that all third part debt held by the relevant subsidiaries in Europe was fully paid, therefore resulting in the European segment of the business being free of external debt.