Deloitte to oversee Supercuts owner administration
Salon chain owner Regis UK has appointed administrators from Deloitte, becoming the latest victim of the UK’s ailing high street as a result. As many as 1,200 could be lost during the process, after landlords scuppered a CVA to turn the beleaguered firm around.
The UK high street looks set to end the decade on a low note, as new research has revealed retailers are seeing their highest level of store closures in nine years. Averaging 16 closures per day, the UK saw a net loss of over 100 more stores than in the same period of 2018 alone, with worse expected to come for the sector as a General Election and Brexit both loom large on the horizon.
In a further blow to the UK retail scene, Regis UK, which trades under the Regis and Supercuts brands, entered insolvency last week and appointed Deloitte as administrator. According to reports from Sky News, the move by the hairdresser – which was sold by its US parent company to a private equity firm two years ago – puts the future of its 220 branches in doubt. At present, no sites have been closed, as Deloitte begins its search for potential investors in Regis UK. At the same time though, some 1,200 jobs are expected to be on the line if Deloitte is unable to secure a buyer quickly.
Joint administrator Rob Harding commented, “The retail trading environment in the UK remains extremely challenging and Regis UK had been seeking to address this through a restructuring of its business. Unfortunately, these trading challenges coupled with the uncertainty caused by the legal challenge to the CVA have necessitated the need for an administration appointment. This in order to provide protection for the business whilst restructuring and sale options are fully considered and explored.”
The decision to enter an insolvency process follows a legal challenge to a restructuring plan for Regis UK which had been tabled in October 2018. The company voluntary arrangement (CVA) was approved by the majority of the company’s creditors last year, however it would have involved slashing rents at many of its branches – in some case by as much as 100%. This infuriated landlords hosting Regis UK’s brands, and by December, companies including retail property giant British Land and Hammerson had filed a legal challenge against the CVA.
The Regis UK scenario is the latest in a chain of events illustrating a growing hostility against CVAs from landlords. Having become dismayed by the deluge of CVAs which have potentially lessened the amount they can make from their tenants, to the extent a similar challenge brought the Arcadia Group to the brink of collapse earlier in 2019 when landlords threatened to block the tycoon's rescue plan. Elsewhere, British Land also mounted a legal challenge to the financial restructuring of retailer Monsoon Accessorize, though it later settled.
