// Ann Summers’ new restructuring plan will cut rents at 25 of its stores
// It has agreed revised rental terms on its other branches following discussions with landlords
// It hopes the CVA will move its remaining stores on to turnover-based rents
Ann Summers has launched a restructuring plan which will cut rents at 25 of its stores amid the pandemic.
The lingerie and sex toy retailer has entered extensive discussions with landlords over plans to switch to turnover-based rents.
It currently operates 91 stores and has already agreed revised rental terms on its other branches following discussions with landlords in recent months.
The retailer said it hopes the CVA will move its remaining stores on to turnover-based rents.
In the UK, several well-known retailers have already begun to move many of their remaining stores to this business model.
British shoe retailer Clarks was recently slammed by its landlords for its plans to switch to turnover-based and zero rental terms.
Despite the challenges, Clarks was given the green light last month to push on with a rescue plan in the form of a CVA, when 90 per cent of its creditors – which include landlords – voted in favour of the proposals.
More recently, menswear retailer Moss Bros launched its CVA proposal which aimed to “restructure its fixed cost base” after trading was “severely impacted” by the pandemic.
However, the retailer’s negotiations with landlords about switching its rental agreements to ones that are based on turnover had failed.
Nevertheless, Ann Summers said it will aim to secure £10 million of new funding to drive its turnaround if the CVA plan is approved by creditors.
It has hired FRP Advisory to oversee the process and will need to secure approval from 75 per cent of landlords at the vote later this month.
“Ann Summers has a bright future but, if the business is to fulfil its potential and prosper in the post-Covid trading environment, we need to align our property costs so they reflect the challenges facing today’s high street,” Ann Summers chief executive Jacqueline Gold said.
“I’m grateful to the majority of our landlords who have worked constructively with us to agree sensible terms on the vast majority of our stores, and these landlords will not be affected by the CVA.
“We continue to invest in our marketing, our product and our brand, and are seeking to protect as many stores and jobs as we can through this process.
“We have successful and growing online and party plan businesses, and, once our store rents are aligned to market levels as a result of this process, we can approach the future with confidence.”