One of Birmingham’s best loved fashion stores has been saved by a company voluntary arrangement (CVA).
Flannels, which has been at the forefront of fashion retail in the city for a generation, will keep its flagship store in the Burlington open as part of the deal but its relatively new operation in the Bullring will close alongside stores in Liverpool and Manchester.
The announcement was made after the proposed company voluntary arrangement (CVA) for the Manchester-based Flannels Group Ltd won the support of creditors.
Almost 90 per cent of creditors, measured by money owed, voted in favour of the proposal, which needed 75 per cent backing to go through, with just one creditor voting against.
Stores in Liverpool’s Met Quarter, Birmingham Bullring and on 55 King Street in Manchester will be closed as part of the CVA.
The Burlington store will be one of 12 stores to remain open but landlords have agreed to a 20 per cent discount of the principal rent in 2010 and a 10 per cent discount in 2011.
“The result of the voting demonstrates the fairness of our proposal that was put to creditors,” said Flannels founder and managing director, Neil Prosser. “We have worked hard to balance the interests of all creditors as part of this process. The proposal allows the business to restructure to a size that mirrors the extraordinary trading conditions that retailers are currently facing. Being able to restructure will preserve the ongoing viability of our business.”
Flannels has 15 stores predominantly based in the Midlands and North of England and employs around 165 people.
It appointed Bill Dawson and Daniel Butters of accountancy firm Deloitte as Joint Nominees on 3 November 2009. Their role will now be to supervise the Company’s adherence to the terms of the CVA proposal.
“This is good news for creditors as the CVA allows the Company to remain as a going concern and maintain its trade,” said Mr Dawson. “It gives the Company and its stakeholders greater certainty as it enters the Christmas trading period and greater job security to employees.”