2,000 jobs at risk as fashion retailer Select looks to restructure
PUBLISHED: 10:12 27 March 2018 | UPDATED: 10:19 27 March 2018
Archant Norfolk 2018
The company behind high street fashion chain Select has become the latest retailer to embark on a radical restructuring that could see several stores close, putting the future of 2,000 staff at risk.
Genus UK, which trades as Select from 183 outlets including five in Norfolk and one in Ely, has called in corporate recovery firm Quantuma to advise on a Company Voluntary Arrangement (CVA), which allows a firm to close loss making stores and secure rent reductions.
Its Norfolk stores are at Fakenham, Thetford, King’s Lynn, Great Yarmouth and Norwich’s Castle Mall.
The proposal includes an option for landlords to “take back loss-making sites” and comes at a dire time for the retail sector, following the collapse of Toys R Us and Maplin.
The likes of Mothercare, Carpetright and House of Fraser are also facing choppy waters as retailers are hammered by Brexit-fuelled inflation, soaring business rates and falling consumer confidence.
Quantuma said the decision to press ahead with the CVA reflected the “current prevailing issues for businesses trading on the high streets”.
Andrew Andronikou, partner at Quantuma, said: “The business has suffered as a result of the depressed retail market and escalating rent and rate charges.
“This inevitably has caused a squeeze on cash flow resulting in a cash burning for a number of years.
“The position for this business, and many businesses of the same model is no longer tenable and has escalated to the present situation where a CVA is considered to be the only option, other than closing it in its entirety”.
Select is a value ladies’ fashion retailer, targeting 18-35-year-olds, but its parent Genus booked a £1.5m loss on sales of £81m in 2016.
Creditors will meet on April 13 to vote on the CVA.
Mr Andronikou added: “The loss of anchor tenants on high streets and in smaller shopping centres has had a downward spiralling effect on stores such as Select, culminating in a reduction of footfall and therefore custom.
“We have carefully considered the formulation of the proposals to present a balanced outcome for both the company and its creditors. We are confident that given the current turmoil in this sector the creditors will support the directors’ proposals and prevent another brand disappearing from our high streets.”