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Landlords to vote on Blacks rescue deal
LANDLORDS of troubled sportswear retailer Blacks Leisure are expected to vote today in favour of a rescue deal that would preserve more than 4,000 jobs.
Creditors of the outdoor chain are set to meet to decide whether to support the planned company voluntary arrangement (CVA) aimed at ensuring the survival of a core section of the business.
The proposals involve asking landlords of 89 closed or closing retail stores to agree concessions on their financial claims on the firm and the British Property Federation (BPF) indicated that creditors were likely to support the deal.
Liz Peace, chief executive of the BPF, said: "The property industry has come a long way and is now more flexible than ever."
But she said that while landlords would "do what they can to work with their tenants" there was a growing unease over the use of CVAs.
"With the average existing retail lease lasting over 12 years Blacks would walk away from many hundreds of years worth of rent if the CVA is passed," she added.
Blacks, which outlined its plans earlier this month, has said the CVA would last nine months if voted through by the requisite 75% of creditors at the meeting.
A pot of 7.25 million has been set aside to compensate just over 100 landlords of retail stores and other sites, equivalent to around six months' rent each.
In addition the proposals include new terms for Blacks' remaining 291 stores to permit monthly payments for 18 months.
The retailer has agreed new banking facilities of 42.5 million with its lender Lloyds Banking Group as part of the plan.
Blacks hopes the move would safeguard 4,300 jobs.
It would have a total of 314 stores and one distribution centre after the proposed restructuring, including a number of sites that are not included in the CVA.
The firm, which has headquarters in Northampton, will operate from 91 Blacks stores, 208 Millets outlets and 15 Freespirit shops.
Blacks made pre-tax losses of 18.1 million in the 26 weeks to August 26, up from 6.7 million previously, as its boardwear division and underperforming Blacks and Millets stores dragged the group down.
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Thursday 24 May 2012
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