AGENDA WEST NEWS: ICSM on Company Voluntary Arrangements as retailer Ann Summers exits its CVA after increasing its online retailing

To CVA or not to CVA

The retailer Ann Summers has returned to profit after a long stretch of trading under a Company Voluntary Arrangement (CVA).

With around 100 retail outlets the company has concentrated on building its online business after it stores were forced to close during the lockdowns. It’s turn around strategy has worked for the lingerie and sex toy business with an increase in sales of 9.3% up to June 2021 and a profit of £113.8 million. That followed a near collapse in the previous tow years with massive losses of £11.3 and £7.2 million for 2019 and 2020.

Those losses saw the firm teetering on the brink but opted for a CVA to protect the business from creditors in October 2020. It is understood that most of the stores will remain open following agreements with landlords to reduce or suspend terms of their leases or rent arrangements.

Ian Carrotte of ICSM said CVAs can be a blueprint for survival for some retailers. “If their core business is sound then as long as they put into action a radical plan to make the company profitable then a CVA is the right course,” he said, “however although a CVA has to be agreed by the majority of creditors many suppliers will feel aggrieved that they do not get paid. Sometimes the debtor will give assurances that they will trade with the revived firm in the future to help redress the losses – but that is not guaranteed.”

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk