CVA the only option for struggling Select

Select has become the latest High Street retailer to run into trouble.

Genus UK, the owner of the fashion chain aimed at young women, is seeking a Company Voluntary Arrangement (CVA) that would let it slash rents and close unprofitable stores. It has called in business advisory firm Quantuma for help with this. A creditors’ meeting has been convened for Friday, 13th April to determine its future.

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In the year to June 2016, Genus UK Ltd made a loss of £1.5 million on sales of £81 million. Select operates from 183 stores across the UK supported by centralised head office and warehouse facilities, plus online trading, and has around 2,000 employees. “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,” says Quantuma’s Andrew Andronikou. “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.”

He adds that 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.”