Company Voluntary Arrangement proposal offers best outcome for creditors as a whole
Business advisory firm Quantuma has filed proposals for a Company Voluntary Arrangement (CVA) to rescue Genus UK Ltd, which is currently in administration, in the High Court of Justice on 24 May.
The company, which trades as ‘Select’, continues to operate from 169 stores across the UK, supported by its head office and warehouse facilities, plus online trading, and has around 1,800 employees. The company trades as a value ladies fashion retailer, targeting 18 to 35-year olds with up to 4,000 fashion products.
Quantuma’s Andrew Andronikou, Brian Burke and Carl Jackson are overseeing the process as joint administrators to the company. The administrators will continue to operate the business with support from its parent company, as they seek to rescue the business and preserve jobs.
A meeting has been convened for 11 June at which the company’s creditors will vote on the company’s future.
The CVA proposal does not propose the immediate closure of any of Select’s stores and does not propose that any immediate redundancies are made.
Andrew Andronikou, partner at Quantuma, said: “The business experienced a sharp downturn in fortunes at the end of 2018. Low levels of consumer confidence, together with Brexit uncertainty and volatile currency, have meant that sales remained subdued in early 2019. The inevitable result was a squeeze on cash flow.
“The turnaround plan embarked upon by the management delivered benefits but had not reached sufficient maturity to protect the business from this impact in the market. There remains the opportunity, with the support of its parent company, to bring these to fruition and in doing so return the business to a stable and profitable position.
“As joint administrators, we have arrived at the view that a CVA offers the best outcome for creditors as a whole. The proposal does not outline the immediate closure of any of the company’s stores, and any immediate redundancies, however some may occur even if the proposal is approved.
“If the proposal is not approved, it is anticipated that the company will remain in administration and, in the event a suitable offer is not received to acquire the business, we will have to consider ceasing its trading activities.”
Ion Fletcher, Director of Finance & Commercial Policy, British Property Federation (BPF) comments: “These situations are never easy, as property owners need to take into consideration the impact on their investors, including those protecting pensioners’ savings via investment into property, as they vote on the CVA proposal.
“Quantuma and Select engaged with the BPF before launching its CVA proposal. This has provided us an opportunity to improve understanding of property owners’ interests and concerns, but ultimately it will be for individual property owners to decide how they will vote on a CVA.”
Notes to Editors
Quantuma is a leading business advisory firm which works with businesses at the key milestones, delivering partner led solutions to help clients take advantage of opportunities and overcome a range of operational and financial challenges, enabling them to achieve their business objectives and ambitions. Offices in London, Southampton, Marlow, Watford, Brighton, Birmingham, Bradford, Nottingham, Bristol, Manchester, Ringwood and Weymouth. In July 2018, the firm opened two international offices in Cyprus (Nicosia and Paphos).