AllSaints launches CVAs to restructure UK and US store estate

AllSaints has launched a company voluntary arrangement (CVA) proposal for its UK and US stores.

The contemporary fashion brand is seeking permission from its landlords to transition most of its 41 stores in the UK and 42 stores in North America to turnover-rent. The company said this “effectively aligns landlords with the group’s recovery and protects the group against further risk of retail closure.”

A small number of stores will close “where business is not feasible”.

Creditors will vote on the proposal at meetings on 3 July and 6 July.

Prior to the outbreak of Covid-19, AllSaints had experienced five consecutive years of year-on-year revenue growth. In its most recent year ended 1 February 2020, sales grew in every region and across every channel.

But the forced closure of the large majority of its stores resulted in a substantial impact on its short-term performance. Like many companies in a similar situation, it looked to cut costs, introducing measures to maximise online sales, halting discretionary spend and using government support where possible.

“We have taken this step in order to ensure the long-term viability of AllSaints in the face of the unprecedented impact that Covid-19 has had on our business and the wider fashion retail industry,” said AllSaints CEO Peter Wood in a statement. “The CVAs will allow us to sustain a strong physical retail presence, which in turn will allow us to protect jobs and continue to provide great product and service to our customers.

“The commitment of our global team and the support of our vendors has been fantastic throughout this exceptionally challenging period. As a result, despite the sudden and adverse impact that Covid-19 has had on our sales and our short-term outlook, we remain confident in the long-term prospects for our brand.”

AllSaints currently employs around 3,000 people and has 255 directly operated stores, franchises, concessions and outlets across 26 countries.

Photo credit: AllSaints, Facebook