Companies in trouble are seeing the CVA (Company Voluntary Agreement) as the the go-to saviour from insolvency in these troubled times. Ian Carrotte of ICSM Credit said: “The reasons are simple – by getting agreement from 75% of a firm’s creditors it is possible to delay the repayment of debts by restructuring them. If the creditors agree, limited company can continue trading. And the reality is with so many firms in trouble their creditors have little choice but to agree. The catch is that a CVA may give a firm some breathing space but it they don’t change their business model then liquidation will happen eventually and creditors will lose out. My message is be very careful not to grant more credit to firms seeking a CVA.”
Off putting no-show signage
Writing in the signage industry’s leading trade magazine Sign Link, Rob Fletcher has highlighted a phenomenon that would have been unheard of a year ago.
He said: “More than 40% of UK shoppers have stopped visiting stores that have unclear signage on novel coronavirus (Covid-19) social distancing, according to a new study by Roland DG.”
Roland DG make wide format printers that are used to print textiles, synthetic fabrics and other large signs.
The journalist said the European survey of over 2,500 people found 80% of consumers feel safer in stores that have clear social distancing signage – such as printed floor stickers – with 78% more likely to shop in stress with proper instructions on social distancing measures.
Ian Carrotte of ICSM Credit said that shopping had been made an unpleasant chore since the Covid-19 crisis and although many retailers had tried their best to improve things simple innovations like signs make a big difference.
He said: “A long queue outside a shop is a turn off but confusion over which way you can go once inside doesn’t help. Shops with clear signage will do better as this survey shows.”
Rob Fletcher said: “Some 40% of shoppers say that businesses are not taking their safety seriously enough, with 75% of consumers saying they are more aware of in-store signage than before the Covid-19 pandemic. Other key findings include that clothes shops in the UK were most likely to not have the correct social distancing signage in place, with 21% of respondents setting out their fears. Supermarkets were also a cause for concern as 19% of shoppers say the right signage is not in place, while 16% were also apprehensive about restaurants and bars.”
Speaking of restaurants Business Sale have reported that the Burrito chain Chilango has been acquired out of administration by investment group RD Capital Partners. The acquisition by RD Capital Partners, for an undisclosed sum, followed a competitive sales process and will see 10 of the chain’s 11 restaurants remain open.
Lingerie retailer’s CVA plans
The Retail Gazette has reported that the lingerie and sex toy retailer Ann Summers is considering a CVA in order to save it from collapse following the shut-down. The reporter Sahar Nazir noted that the retailer’s chief executive Jacqueline Gold said the company might opt for a CVA as some landlords refused to work in partnership, despite the owning family injecting cash to keep the business afloat.
The journalist said: “Losses increased £3 million to £16 million in its most recently reported year, and Gold expects business rates and property costs to increase next year. Ann Summers is currently dealing with the effects of the Covid-19 pandemic despite the improvement of personnel, IT investment and product. Gold said some of the retailer’s landlords have taken a “pragmatic” approach, while others have not and Ann Summers is understood to be preparing to unveil CVA proposals in the next week. She added that landlords have continued to ‘bury their heads in the sand’ and the only way a retailer is able to resolve the situation is to undertake a CVA.”
Moss Bros in trouble
It may only be the first of September but the CVAs keep coming. This time it is that key figure in the menswear wedding high world: Moss Bros. Fashion United’s Huw Hughes writes: “The brand has called in advisory firm KPMG to work on a potential CVA which could lead to store closures and rent cuts, The Times reports. It comes after talks between the brand and its landlords failed to reach an agreement to turn some of its store estate over to turnaround-based rent.
“Moss Bros currently has 125 UK stores and around 1,000 employees. It comes as the formalwear category continues to be significantly impacted by Covid-19, with the cancellation of large events such as weddings and the Royal Ascot dealing significant blows to sales.
“In March, prior to the peak of the Covid-19 pandemic in the UK, Crew Clothing-owner Brigadier Acquisition Company Limited agreed to acquire Moss Bros in a 22.6 million pound deal. However, just weeks after the deal was announced, Brigadier seeked a ruling from the Takeover Panel to cancel its offer. Moss Bros successfully opposed the decision, citing a rule in the Takeover Code that states an offer cannot be lapsed or withdrawn.”
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.firstname.lastname@example.org 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.email@example.com
For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk