My initial Blog on this topic was posted on May 3rd. There I said if the CVA was successful, we’d soon know how much genuine belief the owners have in the future of the business. We now know the CVA will involve 31 store closures, and 10 rent reductions. So far, there is no sign of a Plan B – a plan designed to increase sales from a smaller but more robust core store estate. This is what will determine whether there is a viable future for HoF.
There is talk of new money coming in post CVA but given the black hole that is department store retailing, it looks like a drop in the ocean even if it does materialise. HoF has very little retail experience in its top leadership, most of which is very new to the industry as well as to the business itself. In this market, seasoned retail leaders are struggling to deal with increasing trading pressures. Having a response that is only financial (addresses costs but not sales) will fail eventually.
Will the CVA get voted through? Probably, but it would be very naïve for anyone to regard it as a vote of confidence in HoF’s prospects. The word “support” would be extremely loose. In any case, most of the voting creditors will be suppliers with arguably greater exposure and far less choice. HoF is telling us that it cannot any longer trade profitably in Central London (Oxford Street and Victoria), Birmingham, Edinburgh, Cardiff and Milton Keynes among others. It cannot find enough of its target customers here. This speaks volumes about its own level of confidence and about whatever plans it may have.
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