Landlords have agreed to rent cuts as part of a major restructuring plan for the discount retailer Poundstretcher.
More than 90 per cent of creditors have approved the move, which has provided an extra six weeks lifeline for 253 stores whose futures were at risk.
Just over a fortnight ago the discount chain, which is headquartered in Leicestershire, started talks with its landlords and creditors in a bid to secure its future.
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It said the future of the 253 stores would depend on how well it was trading and the terms that can be agreed with its landlords.
The proposal is part of a Company Voluntary Arrangement (CVA) that the business has launched as part of a wider turnaround plan to restructure its 海角视频 store portfolio.
The plan also includes “stemming losses from underperforming outlets, realigning head office costs and paving the way for investment in the business’ core estate and product offering”.
The business, which was bought by the Leicestershire Tayub family’s Crown Crest wholesale group in 2009, was planning a significant restructuring to achieve sustainable profits bring in cash even prior to the lockdown.
Recent trading figures for Crown Crest showed turnover for its last financial year was £442 million – up from £397 million a year earlier.
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However operating losses grew from £4.9 million to £9.4 million, due to pressures on the wholesale side of the business as well as Poundstretcher sales falling.
Poundstretcher said the future of the 253 stores – which employ around 2,000 people – “will depend on the commercial merits of each store” in collaboration with landlords, casting a shadow over their long-term future.
There are 5,500 people employed by the group as a whole.
The deal has also secured rent cuts of between 30 per cent and 40 per cent for 84 of its 450 stores, while around 94 stores will continue to pay current rents.
Will Wright, restructuring partner at KPMG and joint supervisor of the CVA, said: “The approval of the CVA provides a stable platform from which the company can continue to operate across a more focused store portfolio.”
Poundstretcher opted to launch the CVA after the impact of Covid-19 on store footfall “exacerbated” problems after a decline in profitability in recent years.
Last month, hotel chain Travelodge secured the future of its around 10,000 staff after landlords backed its CVA plan.