Stylo looks to future with rescue plan

SHOE retailer Stylo has appointed administrators to its 400-strong chain of stores as it looks to restructure its business in a bid for survival.

The move by the Bradford-based group saw administrator Deloitte appointed to the subsidiaries Stylo Barratt Shoes, Stylo Barratt Properties, Priceless Shoes Properties, Barratts Shoes Properties and Comfort Shoes.

The parent Stylo is not in administration although its shares have been suspended on AIM.

The administrator is seeking agreement from creditors to place the companies into a Company Voluntary Arrangement (CVA) and the stores remain open and continue to trade.

The move, which would see all creditors paid in full and new agreements with the landlords of its stores, has the support of the group’s banks and would see further investment from founders and major shareholders the Ziff family.

Stylo operates 400 high street shoe stores in the UK under the Barratts and Priceless brands, employing 5,450 staff.

The complex move is seen as the best possible way for the group to avoid shop closures and job losses and to pay creditors rather than through a much-criticised pre-pack administration.
 
Dan Butters, Leeds-based Deloitte partner and joint administrator, said: “Stylo has faced a downturn in trading as a result of the current difficult economic and

market conditions. We have been appointed as administrators to Barratt and Priceless while we contact all creditors with a proposal to rescue the companies via a series of CVAs.

“Under the CVAs, we will be asking creditors and landlords to contractually vary their terms of trade in order to give Barratts and Priceless the necessary breathing space to allow them to deliver value for all stakeholders in the future.

“We are seeking to enable the rescue of Barratts and Priceless, while giving creditors and landlords certainty over their own positions. Ultimately, we are giving creditors and landlords a chance to vote on the future of the companies.

“If creditors accept the proposals, the administration would cease, after a 28 day cooling off period, and the companies would continue to trade under the CVAs,

which would remain in place for two years. The administrators would become supervisors  to ensure that the companies meet their obligations to creditors.

“In the meantime, the stores will continue to trade as normal,” added Mr Butters.

Michael Ziff, chairman and chief executive of Stylo, said: “After much careful thought and planning, I am satisfied that we are proposing an arrangement which will enable the business to move forward with a stronger foundation and achieve a solution that is in the best interests of all stakeholders.”

Town Centre Securities, the Leeds-based property investment and development company, said it supported Stylo’s plans and that CVAs “represent an innovative and pioneering route to address the issues faced by many retailers in the current economic environment”.

Town Centre and Stylo share Edward and Michael Ziff as directors and other members of the Ziff family as shareholders.

Stylo is the tenant and Town Centre Securities the landlord at a premises at the Merrion Centre in Leeds and Town Centre said “in principal” that it would approve Stylo’s CVA.