Fashion retailer Select launches fresh attempt to rescue business
Administrators at Select have launched proposals for a controversial insolvency process as the troubled women’s fashion group battles to stay in business.
Creditors are set to decide whether or not to trigger a Company Voluntary Arrangement (CVA) on 11 June, with administrators warning that a vote against a CVA would mean the company could stop trading.
Embarking on a CVA, a process that has become a thorny issue between landlords and administrators, often involves cutting costs through rent reductions and store closures.
The value ladies fashion retailer, which trades as 'Select' in 169 stores and employs roughly 1,800 people in the UK, collapsed into administration earlier this month, just a year after pushing through an initial CVA to slash costs.
Read more: High Street fashion chain Select enters administration
Quantuma, the advisory firm that is overseeing the administration, has blamed low levels of consumer confidence, together with Brexit uncertainty and a volatile currency, on sales remaining subdued throughout the start of 2019 and a subsequent squeeze on cash flow.
Andrew Andronikou, partner at Quantuma, said: "As joint administrators, we have arrived at the view that a CVA offers the best outcome for creditors as a whole. The proposal does not outline the immediate closure of any of the company’s stores, and any immediate redundancies, however some may occur even if the proposal is approved."
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Andronikou said the turnaround plan "embarked upon by the management delivered benefits but had not reached sufficient maturity to protect the business from this impact in the market".
Quantuma’s Andrew Andronikou, Brian Burke and Carl Jackson are overseeing the process as joint administrators to the company. The administrators said they will continue to operate the business with support from its parent company, Genus UK.