SRG announces CVA proposal

Speciality Retail Group Ltd (SRG), the menswear retailer, which trades as the Suits You, Racing Green and Young's brands, has announced today a company voluntary arrangement (CVA) proposal.  SRG runs 71 stores across the UK and employs approximately 300 people.  There will be no immediate store closures or redundancies.

 

Commenting on the announcement, Richard Fleming, UK Head of Restructuring at KPMG, and proposed 'supervisor' of the CVA, said:

"SRG is a successful brand in its designer outlet stores but has been unable to stave off the drop off in consumer demand in its high street stores.  While the company has taken significant steps to address its problems, the business faces administration unless it can restructure its operations via a CVA. 

"Unlike the JJB and Blacks CVAs where loss-making stores were closed and landlords of these stores were offered 6 months rent plus rates, SRG is not proposing to close any of its stores immediately.  Landlords of the 42 loss-making stores will be offered 60% of the full rent for a period of 18 months.  The stores will continue to trade during this period.  If, however, the landlords wish to take on new tenants, they can do so by giving 45 days notice.  We believe this offers the landlords more flexibility and, indeed, is more generous than previous proposals as the reduced rent over 18 months equates to 11 months rent.  SRG will continue to pay rates in full."

Brian Green, restructuring partner at KPMG, and proposed 'supervisor' of the CVA, added:

"In the coming weeks, we will be involved in meetings with the landlords to explain the proposal in more detail.  For the CVA proposal to take effect, 75% of all creditors must agree to the terms.  The creditors' meeting will be held at London Chamber of Commerce and Industry, 33 Queen Street, London, EC4 1AP at 12 noon on 23 February 2010.  If voted through, the CVA will last for around 18 months."

The remaining creditors have not been asked to compromise financially but the landlords of the 29 profitable stores have been asked to move to a monthly payment schedule for 18 months.

 

-Ends-


Notes to editors:

There are two Suits You branded stores in Ireland, they are not part of the CVA.

For further information on the CVA, please contact

Sorrelle Cooper, Senior PR Manager: 020 7694 8527 / 07932 078218
sorrelle.cooper@kpmg.co.uk      

KPMG Press Office: 020 7694 8773

About company voluntary arrangements (CVAs)
Where a company is experiencing difficulties in paying its debts, the directors can propose a company voluntary arrangement (CVA) whereby the company enters into a legally binding agreement with its creditors, such as their suppliers or landlords.  In a similar vein to an individual voluntary arrangement (IVA), which gives an individual an alternative to bankruptcy, a CVA enables a company and its creditors to come to a compromise agreement and avoid an administration or liquidation.  A CVA can provide a company with some breathing space to allow it to reorganise or restructure its funding and/or its operations with as little disruption to the day to day trading as possible, with the control of the company usually staying within the existing management.

About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff.  The UK firm recorded a turnover of £1.6 billion in the year ended September 2009. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 144 countries and have more than 137,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  KPMG International provides no client services.