Updated: 20th July 2016
A deal has been agreed that should see the Store Twenty One clothing retailer rescued from collapse but the business is nonetheless set to close 77 of its branches around the UK.
Store Twenty One has been struggling to stay afloat in recent months but a Company Voluntary Arrangement (CVA) has been secured on its behalf with the result being that it will be paying considerably reduced rents on more than 100 of its stores.
Expectations are that the CVA, which is an official form of insolvency, will result in around 1,200 jobs being saved across the business.
However, with close to 80 of its shops now set to be closed, there are still likely to be large-scale job cuts with more than 500 staff members facing the prospect of being made redundant.
The stores that are set to be closed have been described by Store Twenty One as being “not viable”.
Having traded as Quality Seconds until it was taken over by the Indian textiles group Grabal Alok in 2007, the company behind Store Twenty One has been retailing in the UK since 1932.
Its woes have been part of broader issues facing some of Britain’s best known high street retailers in 2016, with BHS having recently collapsed after failing to secure a CVA deal that might have saved it and thousands of jobs.
Store Twenty One’s Indian owners have said that the stores earmarked for closure do not have “any prospect of being restored to viability even if a reduction in the amount of rent is obtained”.
“We would like to thank all of our employees, creditors and other stakeholders for their support, in what we know has been a very difficult time,” said Pravin Soni, Store Twenty One director.
“The directors and management team now look forward to focusing on the future of Store Twenty One and working with everyone to make this business a success for many years to come.”
According to documents presented to the company’s creditors as a CVA deal was being worked on recently showed that Store Twenty One had made losses every year since it was acquired by Brabal Alok in 2007.
The deal to reduce rents on the retailer’s stores is understood to have been vital to Store Twenty One’s continued existence with administration or liquidation cited as an inevitable outcome if those discounts were not to have been secured during recent negotiations.