// Jigsaw launches CVA proposals, with creditors due to vote on it on Sept 3
// The proposals features 19 stores earmarked for closure
// 16 stores will remain on full rent but the remaining 41 will switch to turnover-based rent
Jigsaw has reportedly earmarked 19 of its stores that could face closure after launching a CVA proposal this week.
According to Drapers, some of the earmarked store locations facing closure include Westfield London, Bluewater in Kent, Manchester and Birmingham.
The CVA also proposes that 41 Jigsaw stores will switch to turnover-based rent, while the fashion retailer’s remaining 16 shops will remain on full rent.
Of the 41 switching to turnover-based rent, 24 would pay the higher of 11 per cent of net sales turnover each year or 20 per cent of its contractual rent, according to Drapers.
The remaining 17 stores would pay eight per cent of net sales or 10 per cent of the contractual rent.
The CVA proposal also reportedly features a £4 million revolving credit facility from main shareholder Mountain Berg, should the CVA be approved by creditors.
Mountain Berg has also reportedly provided a £1 million working capital facility to fund Jigsaw through the CVA process.
Creditors will vote on the CVA proposal on September 3.
It comes after Jigsaw’s sales for the year to January slipped by seven per cent to £81 million while EBITDA loss after exceptionals deepened from £1.5 million to £2.4 million.
Jigsaw has also had three chief executives and three chief financial officers in under three years, and reportedly attributed its poor trading to being slow to invest in ecommerce.
“Like all retailers, Jigsaw is assessing all aspects of its business to ensure that it is in the best position to navigate through this difficult period,” a Jigsaw spokesperson told Drapers.
“Last year, Jigsaw started to withdraw from non-core areas of the business. However, the impact of the Covid-19 pandemic on the retail sector at large has meant that we have had to take further accelerated action to safeguard the future of our business.
“We are working with [advisers] Cavendish and KPMG to undertake this strategic review of our business and for our conversations with our landlords.
“We will continue to work closely with our landlords as we assess our store portfolio.”