Visits: 42
Alvarez & Marsal managing directors Richard Fleming and Mark Firmin have been appointed as CVA nominees.
As part of the CVA, AllSaints is proposing to pay turnover rent on most of its 41 UK stores and 42 North American stores.
A “small number of stores will close where business is not feasible”, the company said.
Creditors will vote on the proposal at meetings on 3 July for AllSaints USA and 6 July 2020 for AllSaints Retail in the UK.
AllSaints’ leases on its stores in the US and Canada are held in its AllSaints USA subsidiary. As the subsidiary is a UK registered and managed company, it is able to participate in the CVA process.
AllSaints said: “Applications to the US and Canadian courts have been made simultaneously with the launch of the ASUSA CVA, in order for the CVA to be recognised in both jurisdictions. If and when creditors approve the ASUSA CVA, follow-up recognition submissions will be made to both courts.
“As a result, while landlords in North America may be less familiar with the CVA process than landlords in the UK, they will be able to benefit from a successfully implemented CVA under both UK and US/Canadian law.”
“The following parties and creditors will not be compromised or impaired in any way by the CVA in North America: employees, suppliers, general unsecured creditors (other than landlords), secured lenders, tax claims held by any government unit or municipality, and parties to licences and contracts.”
Peter Wood, CEO of AllSaints, said: “We have taken this step in order to ensure the long-term viability of AllSaints in the face of the unprecedented impact that Covid-19 has had on our business and the wider fashion retail industry.
“The CVAs will allow us to sustain a strong physical retail presence, which in turn will allow us to protect jobs and continue to provide great product and service to our customers. Prior to the outbreak of the pandemic we were seeing increased demand for AllSaints in every part of the world in which we operate, and during lockdown we have continued to reach new customers via our online channels.”
AllSaints has 255 stores across 26 countries and more than 3,000 employees.
The retailer added: “Prior to the outbreak of the Covid-19 pandemic, AllSaints had delivered year-on-year revenue growth for five successive years. In its most recent financial year, ending 1 February 2020, it delivered sales growth in every region and across every channel in which it operates.
“However, the closure of the vast majority of the group’s retail estate around the world as a result of the pandemic has inevitably had a substantial and sudden impact on its short-term sales.
“AllSaints took immediate actions to mitigate the impact and reduce costs, including a range of measures to maximise online sales, as well as halting all discretionary spend and using government support where possible.
“While AllSaints is now beginning to reopen its stores around the world, it is doing so in the environment of an ongoing pandemic, with extensive social-distancing measures in place, and significant uncertainty around customer appetite to travel and shop in store.
“A compromise with the group’s creditors, via the CVAs, is therefore now required to ensure the viability of AllSaints’ business. This will enable the group to sustain a strong physical retail presence, which in turn will allow it to protect jobs and continue to serve its customers.”
AllSaints was founded in 1994 and has been owned by private equity investor Lion Capital since 2011.
AllSaints is being represented by law firms Kirkland & Ellis International in the UK, Kirkland & Ellis in the US and Blake Cassels & Grayson in Canada.
