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Licensed Insolvency Practitioners With National Coverage

0800 9700539
07833 240747

Retail

Betterware goes into administration soon after Kleeneze

in A guide for redundant employees in administration or insolvency situations News Retail What Does Going Into Administration Mean?

Betterware, which sells household items via a catalogue sent to millions of homes, has gone into administration following its sister company Kleeneze.  Betterware employed directly 90 people and thousands of door-to-door selling roles.Betterware said that difficult trading conditions and cashflow problems had been responsible for its demise.The firm started in 1928 when it was founded in east London as a door-to-door seller of brushes and polishes. The catalogue was launched in the 1970s and in 2015 the business was bought by JRJR, a Texas-based consumer sales group.The company relies on thousands of self-employed agents who distribute the catalogue around the country. Many of them have other forms of income to supplement their earnings.Begbies Traynor, the company’s administrator, said that Betterware had ceased trading, with all staff made redundant. “Our aim was, of course, to find a purchaser for the business as a going concern in order to safeguard the jobs, but unfortunately this did not prove possible,” it said.Any parties interested in acquiring assets of the company has been asked to contact the joint administrators Gareth Rusling and Claire Dowson of Begbies Traynor as soon as possible.No details have been given to those who may have ordered goods but have a look at our page on “will I get my goods!”This is what one of the regional managers sent to us to put her side of the story

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Betterware goes into administration soon after Kleeneze

New Look to use CVA to close 60 stores

in News Retail What is a CVA (Company Voluntary Arrangement)?

Updated:New Look is now considering a CVA in order to close up to 60 stores, which represents 10% of its portfolio, after a very tough year in which UK sales were down 8% on like for like comparisons. 980 jobs are at risk. The South African owned business will need the permission of its bondholders. The plan also includes a rent reduction and new lease terms for 393 of its stores.New Look, which is owned by South Africa's Brait, has asked its creditors to approve the proposal by March 21 and all stores will remain open until then. Deloitte is acting as a nominee to the CVA.It has also been reported that the firm had lost its credit insurance from some of its suppliers that will mean that it will have to pay upfront for its supplies.  This has echoes of many other firms that have gone bust where the failure has been precipitated by the withdrawal of credit insurance.New Look ‎is the latest in a series of High Street names to look at trying to reduce the size of their store portfolios amid rising pressures from online and discount rivals, increased living wage and a deteriorating outlook for consumer confidence.Expensive High Street stores can be cut back provided that the lease allows for early termination.  If not the only way out is to surrender the lease that can be very expensive or use a company voluntary arrangement (CVA).A CVA allows the retailer to determine its lease obligations which can greatly help the company's cash flow.Daniel Butters, a partner at Deloitte, said that the CVA “will provide a stable platform upon which management’s turnaround plan can be delivered”.For more information on why a CVA is a perfect mechanism for helping retailers, read our retailer rescue page Why not read our case study where we rescued a multi-store retailer

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New Look to use CVA to close 60 stores

Byron Burgers to Seek CVA As Chain Struggles

in Hospitality News Retail What is a CVA (Company Voluntary Arrangement)?

The Byron Burger chain of upmarket burger restaurants has announced that it will be looking for the support of its creditors by way of a company voluntary arrangement (CVA).  Byron Burgers employs 1800 staff in 70 outlets.  The company is asking for a 55% rent reduction on 20 of its restaurants and to open a dialogue with the landlords regarding continuing trading.This is the latest in a line of businesses such as Toys R US that have been struggling recently and have looked at using the CVA mechanism.    The CVA will allow the company to vacate some of its properties and close its branches which, according to the company, have not performed to expectations.In order for the rent reductions to be binding on the other landlords, they will need the support of 75% by value.  These landlord CVAs are becoming more popular as retailers struggle with high premises costs.Rumours about the business' financial situation have been circulating since September last year when we reported that Byron confirmed it would be closing four of its outlets.Simon Cope, Byron chief executive, said: "Byron's core restaurant business and brand remain strong but the market that we operate in has changed profoundly."In order to continue serving our loyal customer base, we need to make some critical and difficult changes to the size and shape of our estate."CVAs are not popular with landlords as some see it as a way of businesses just dumping unprofitable stores.  However, in order to do a CVA, the company has to be insolvent on one of the 3 tests.  In this case, the business can argue that it is balance sheet insolvent as the ongoing costs and liabilities of the unprofitable stores will make the whole business insolvent.If you are a retailer or hospitality business then a CVA can be a very powerful mechanism to save your business.  See our page on retailer rescue or give us a call on 01289 309431

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Byron Burgers to Seek CVA As Chain Struggles