// Administrators launch CVA to rescue Select
// CVA proposals does not include any immediate store closures or redundancies
// Despite this, administrators warn this may happen if CVA is approved
Administrators have launched a CVA for Select in a last ditch attempt to save the womenswear retailer from complete collapse and to preserve 1800 jobs.
The value fashion chain, which operates from 169 UK stores, went into administration earlier this month after a period of subdued sales.
The CVA, carried out by Select’s administrators from advisory firm Quantuma, does not include proposals for immediate store closures nor any redundancies.
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However, advisers said some may occur even if the CVA proposals are approved.
In addition, if creditors do not approve the CVA and no buyer is found to takeover the retailer, then Select is expected to cease trading.
A meeting has been convened for June 11 during which Select’s creditors – which includes landlords – will vote on the retailer’s future.
Select had just gone through an earlier CVA process in April last year, and its fall into administration earlier this month marked the second time the retailer had gone down that path.
“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 partner Andrew Andronikou said.
“There remains the opportunity, with the support of its parent company, to bring these to fruition and in doing so return the business to a stable and profitable position.
“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.
“If the proposal is not approved, it is anticipated that the company will remain in administration and, in the event a suitable offer is not received to acquire the business, we will have to consider ceasing its trading activities.”
When Select took out a CVA last year, it managed to cut its rents by up to 75 per cent and saved nearly 2000 jobs.
Select came under the ownership of Turkish entrepreneur Cafer Mahiroğlu in 2008 when he bought the fashion chain out of its first administration.
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