AllSaints to switch to turnover rents after CVA approval
Creditors at troubled fashion retailer AllSaints have approved its proposals for two company voluntary arrangements, which mainly involves a switch to turnover rents.
The retailer gained a 93% majority vote from landlords within its All Saints Retail Limited structure, and a 90% from its US subsidiary.
Under the proposals, turnover rents will be introduced for the majority of its 41 stores in the UK and 42 stores in the US.
Creditors at troubled fashion retailer AllSaints have approved its proposals for two company voluntary arrangements, which mainly involves a switch to turnover rents.
The retailer gained a 93% majority vote from landlords within its All Saints Retail Limited structure, and a 90% from its US subsidiary.
Under the proposals, turnover rents will be introduced for the majority of its 41 stores in the UK and 42 stores in the US.
A “small number” of lossmaking stores are expected to close, but specific figures were not disclosed.
AllSaints operates 225 stores, franchises, concessions and outlets in 26 countries including the UK and the US.
Peter Wood, chief executive of AllSaints, thanked landlords “for their patience and understanding”, adding: “The decision to launch the CVAs was not taken lightly, and this successful outcome will be instrumental in helping us to ensure the long-term viability of AllSaints.”
Law firm Royds Withy King, which acts for AllSaints on real estate matters in the UK including its move to turnover rents, said the outcome marked a “major milestone in the wider adoption of turnover rents and a true partnership between retailer and landlord”.
Vicky Hernandez, a partner at Royds Withy King, said: “Turnover rents are not new but have been slow to take off across the wider retail sector because they create very real challenges around where gain and pain are shared.”
She added: “Retailers might understandably be reluctant for online sales to be used in determining rents when shoppers have no interaction with a store. Landlords, on the other hand, might feel put out if net sales do not include click and collect sales from a particular store.
“There are so many more examples of similar issues to be determined and, whilst solicitors can predict and address such issues in the drafting of a lease, the true answer rests in a much more open and honest relationship where retailers provide landlords access to detailed financial and footfall information.”
To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette
