// Dune launches CVA restructuring deal to cut rent costs
// If approved, it will not result in any immediate closures across its stores and sites will move to turnover-based rents
// Dune has been “affected significantly by the impact of lockdown measures on customer footfall across its sites”.
Dune has launched a major restructuring deal to secure lower rents after Covid-19 lockdowns had a “severe” impact on its finances.
The footwear retailer, which was founded in 1992 by chief executive Daniel Rubin, is aiming to achieve this through the launch of a CVA.
Dune currently operates 43 standalone stores and 175 concessions and employs around 1200 people.
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It has hired Will Wright and Chris Pole from KPMG’s restructuring practice to oversee the CVA.
The retailer said it has been “affected significantly by the impact of lockdown measures on customer footfall across its sites”.
These stores have remained close due to non-essential status.
Dune said that future trading is expected to be “adversely impacted” by the current restrictions and is therefore undertaking the restructuring programme with the support of investors.
If approved, the CVA will not result in any immediate closures across its stores but will see a number of sites move on to turnover-based rents.
Dune’s CVA comes after rival Clarks secured a similar deal in December to agree reduced rents across many stores.
“Before Covid-19 hit, the business was trading robustly, but the resulting lockdowns have had, and continue to have, a severe financial impact,” Rubin said.
“We are profoundly grateful for the support shown by our key stakeholders since the start of the pandemic, but with so much uncertainty still surrounding the outlook for non-essential retail, we’re now in a position where we need to seek additional support if we are to protect our business.
“The CVA provides us with much-needed flexibility so that we can emerge on the other side of this crisis in the best shape possible.”
Will Wright said: “While there is increasing hope that restrictions will be eased later in the spring, the reality is that a number of high street operators have little option but to take urgent steps to address their fixed cost base now if they are to make it through the next few months.
“The proposals launched by Dune today are no exception, and if approved, would give the company that vital lifeline to see them through the uncertain weeks and months ahead.”
with PA Wires