The first details of Office Outlet’s company voluntary agreement (CVA) have emerged, including its request for landlords to forfeit rent payments for three years on 20 of its stores.
The stationery retailer launched a CVA on Monday afternoon, which will include closing four of its 95 stores, but also asking landlords for an unprecedented rent holiday on 20 of its stores.
READ MORE: Landlords vs CVAs: The battle of UK retail
The offer is being slated as one of the most extreme measures included in a CVA so far this year.
Retailers have been criticised for their rapid uptake of CVAs, which put pressure on landlords and creditors to accept their terms, in order for retailers to stay afloat.
The CVA mechanisms require the support of creditors, but are often voted in on the basis that they are preferable to bankruptcy.
Office Outlet have asked that landlords across the majority of its store base to agree on sharp reductions in rents, but it’s the move to ask for rent-free occupancy for three years across 20 stores that is thought to be a first for the retail industry.
“Given the significant decline in footfall at out of town retail parks resulting from recent retail failures and the current retail environment, a proposal to restructure the fixed costs is required to lead to long term profitability,” a spokesperson for Office Outlet said on Monday.