How could this impact your business?
An announcement on their website reads: “Richard Michael Hawes and Daniel Francis Butters were appointed Joint Administrators of SUK Retail Limited t/a Office Outlet and SUK Oldco Limited (“the Companies”) on 18 March 2019.
The affairs, business and property of the Companies are managed by the Joint Administrators. The Joint Administrators act as agents of the Companies and contract without personal liability.”
The restructure was sparked by a “significant decline in footfall” at out-of-town retail parks and the CVA was an attempt to reduce fixed costs including rent to help ensure long-term profitability. Chief Executive Chris Yates set about negotiating three-year, rent-free deals for 20 stores and it is thought that the looming quarterly rent deadline on March 25 has forced their hand.
What could happen next?
You can read more about our thoughts on whether CVAs are effective for large retail companies here. There may well be interest in their smaller stores and prime locations from other buyers but it is a worrying time for staff learning the news today.
Sunday Times Business Editor Oliver Shah identifies an issue with large companies entering into a CVA. He says: “CVAs are increasingly unpopular with commercial landlords, who often complain that retailers are asking them to swallow rent cuts without producing coherent turnaround plans or putting in cash of their own.
“CVAs tend to delay the inevitable: Of the 12 carried out in the decade after 2008, only two resulted in survival, according to property agency Colliers, with Office Outlet being only the latest example.”
Do you work for Office Outlet or are a supplier? Are you worried about the administration process and what could happen next?
Contact us for a free chat today to discuss your options and see how we can help you plan your next move.