5,500 Jobs at risk as Poundtsretcher prepares for CVA
The discount retailer Poundstretcher with 450 stores in the UK, is understood to have drawn up plans for a CVA that could lead to the closure of half of its store estate.
The CVA could be launched as early as next week, as it prepares for the radical restructuring plan in an effort to secure low rents from landlords at 330 of its 450 stores across the UK.
According to Sky News, at least 250 of those stores would see rent paid in full for an initial six-week period, after which their continued trading would depend on the outcome of commercial discussions with landlords. The CVA proposals are being supervised by KPMG.
Meanwhile, landlords are understood to have been paid arrears, with the CVA proposals said to allow for all remaining arrears to be paid if the proposal is approved by creditors. The plans are being deliberated at a time of uncertainty, with major retailers seeking to close stores while also preparing to reopen others after being forced to close due to the government-mandated lockdown.
A CVA would put an unspecified number of jobs at risk, with the final number dependent on the discussions with landlords. Poundstretcher currently employs 5500 people across its stores, head office and warehouses.
The retailer was making a loss prior to the Covid-19 pandemic, with owner Aziz Tayub warning that the success of its cost-cutting strategy was vital to securing its future.
The majority of Poundstretcher’s stores remained open since the pandemic struck the UK, because they sell essentials such as food and medicine.
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