Upmarket fashion group Robert Goddard's company voluntary arrangement has been approved, with backing from 90% of its creditors.
CoStar News revealed this week that the group was pursuing the first use of the contentious restructuring procedure in two years. KSA Group has advised on the CVA.
Robert Goddard has 10 stores at Biggleswade Retail Park, Rushden Lakes Shopping Centre, Chequers Shopping Centre in Huntingdon, 6-8 Bridge Street in Wisbech, 12 Market Place, Spalding, Water Gardens Shopping Centre in Harlow, The Atrium in Camberley, 7 Hermitage Road in Hitchin, Parkway Shopping Centre in Newbury, and Queengate Shopping Centre in Peterborough.
There will be no store closures as a result of the CVA and the 100 staff at the business will be unaffected. Robert Goodard says it needs to reduce its fixed costs and overheads and the CVA batches the stores into different categories where it is seeking different concessions and rent reductions from landlords. Typically it occupies these stores on 10-year leases paying in excess of £100,000 a year.
At its Category A stores at Wisbech, Spalding, Harlow, Peterborough and Newbury, where landlords include Standard Life, Invesco, Hitchin Property Trust and Midland Bridge it will continue to pay rents as before as well as arrears.
At its Category A1 stores at Rushden Lakes, where the Crown Estate is a landlord, it will surrender Unit A6 and switch its rent to being paid on a turnover basis at 4% on Unit A7, moving to 8% after two years. The Crown has said it has a number of tenants seeking to take the space.
At its Category B2 store at Huntingdon there will be a 12-month rent-free period and the landlord will be paid a rent based on 8% of the turnover.
The Robert Goddard store in Biggleswade, where British Land is landlord, is deemed a B3 store. Here there will be a 12-month rent free period and the landlord will be paid afterwards either 50% of the previous rent or 8% of the net turnover of the store.
The B4 store in Camberley will be subject to a 12-month rent-free period. The rent under the lease will no longer apply and the landlord will be paid a rent based on 2% of the net turnover of the store from the end of the rent-free period, escalating by 1% a year until year 5.
In 2008, Oliver Tookman bought the century-old Robert Goddard business and has grown the store network from two to 10. The retailer stocks nearly 50 premium men’s, women’s and children’s wear brands, including Ralph Lauren, Hugo Boss and Armani.
CVAs have been much less used in the past three years as market conditions have improved for retailers.
They are legally binding agreements with a company's creditors to allow a proportion of its debts to be paid back over time and need 75% of the creditors, by value, to support the proposal. For a review of why they have been controversial in the UK but may be making a comeback, click here.