The hairdressing group Regis, the owner of Supercuts, is asking landlords for free rent at more than 20 stores as part of a rescue plan.
The group has asked for rent reductions of 25-100% at 110 of its 220 salons. Regis warned that if the plan is not approved by creditors then it was likelyit would enter administration.
The request is part of an insolvency procedure known as a company voluntary arrangement, being handled by the advisory firm Grant Thornton, which Regis said would allow it to invest to drive growth.
Jackie Lang, the managing director of Regis UK, said: “This action has been taken to restructure our costs to ultimately enable reinvestment into the business to improve our digital platforms and our expertise in-salon. If successful, over 90% of our creditors will be unaffected.”
Creditors will vote on the deal on 26 October and 75% must vote in favour for the restructure to go ahead.
The CVA is the latest of a string of similar cost-cutting plans in the struggling retail sector that have led to hundreds of store closures across UK high streets and shopping centres this year. Carpetright, Mothercare and New Look have used CVAs to get rid of unwanted stores, while Toys R Us and House of Fraser tried CVAs before going into administration.
Eddie Williams, the head of restructuring at Grant Thornton’s Birmingham office, who is working on the deal, said: “As part of this, there are no planned salon closures, and as such no employee redundancies are planned, which is a positive in the context of the challenges the high street has seen over the last 12 months and which continue to be prevalent.”
Grant Thornton said the British Property Federation, representing landlords, had been consulted about the proposal.
But one landlord told the Guardian: “There has been no warning at all. They suddenly stopped paying their rent and within days a CVA document arrived.”
