// Poundstretcher prepares for CVA as it seeks low rents from landlords
// The high street discounter’s stores are at risk of permanent closure
Poundstretcher has reportedly drawn up plans for a CVA that could shutter over half of its store estate in the UK.
The discount chain could launch the CVA within days, as it prepares for the radical restructuring plan in an effort to secure low rents from landlords at 330 of its 450 stores across the UK.
At least 250 of those stores would see rent paid in full for an initial six-week period, after which their continued trading would depend on the outcome of commercial discussions with landlords, Sky News reported.
- Poundstretcher store closures likely as KPMG is drafted in
- Matalan & Poundstretcher under scrutiny over unpaid rents
The CVA proposals are being supervised by KPMG.
Meanwhile, landlords are understood to have been paid arrears, with the CVA proposals said to allow for all remaining arrears to be paid if the proposal is approved by creditors.
The plans are being deliberated at a time of uncertainty, with major retailers seeking to close stores while also preparing to reopen others after being forced to close due to the government-mandated lockdown.
A CVA would put an unspecified number of jobs at risk, with the final number dependent on the discussions with landlords.
Poundstretcher employs 5500 people across its stores, head office and warehouses.
The retailer was making a loss prior to the Covid-19 pandemic, with owner Aziz Tayub warning that the success of its cost-cutting strategy was vital to securing its future.
Most of Poundstretcher’s stores have remained open since the pandemic struck the UK, because they sell essentials such as food and medicine.