LONDON, June 17, 2020 (GLOBE NEWSWIRE) -- AllSaints (or “the Group”), the global contemporary fashion brand, today announces that it is restructuring its store portfolio through CVAs in both All Saints Retail Limited (or “ASRL”) and its subsidiary AllSaints USA Limited (or “ASUSA”).
Background and rationale
Prior to the outbreak of the COVID-19 pandemic, AllSaints had delivered year-on-year revenue growth for five successive years. In its most recent financial year, ending 1 February 2020, it delivered sales growth in every region and across every channel in which it operates.
However, the closure of the vast majority of the Group’s retail estate around the world as a result of the pandemic has inevitably had a substantial and sudden impact on its short-term sales. AllSaints took immediate actions to mitigate the impact and reduce costs, including a range of measures to maximise online sales, as well as halting all discretionary spend and using Government support where possible.
While AllSaints is now beginning to re-open its stores around the world, it is doing so in the environment of an ongoing pandemic, with extensive social distancing measures in place, and significant uncertainty around customer appetite to travel and shop in store.
A compromise with the Group’s creditors, via the CVAs, is therefore now required to ensure the viability of AllSaints’ business. This will enable the Group to sustain a strong physical retail presence, which in turn will allow it to protect jobs and continue to serve its customers.
AllSaints is putting forward a proposal to its landlords that will see most of its 41 stores in the UK and 42 stores in North America move to turnover-rent (also known as percentage rent), which effectively aligns landlords with the Group’s recovery and protects the Group against further risk of retail closure. A small number of stores will close where business is not feasible. Creditors will vote on the proposal at meetings on 3 July 2020 (ASUSA) and 6 July 2020 (ASRL).
North America – specific points to note
AllSaints’ leases on its stores in the US and Canada are held in its ASUSA subsidiary. However, this subsidiary is a UK registered and managed company, and as such is able to participate in the CVA process.
Applications to the US and Canadian courts have been made simultaneously with the launch of the ASUSA CVA, in order for the CVA to be recognised in both jurisdictions. If and when creditors approve the ASUSA CVA, follow-up recognition submissions will be made to both courts.
As a result, while landlords in North America may be less familiar with the CVA process than landlords in the UK, they will be able to benefit from a successfully implemented CVA under both UK and US/Canadian law.
The following parties and creditors will not be compromised or impaired in any way by the CVA in North America: employees, suppliers, general unsecured creditors (other than landlords), secured lenders, tax claims held by any government unit or municipality, and parties to licenses and contracts.
Commenting on the launch of the CVAs, Peter Wood, CEO of AllSaints, said:
“We have taken this step in order to ensure the long-term viability of AllSaints in the face of the unprecedented impact that COVID-19 has had on our business and the wider fashion retail industry. The CVAs will allow us to sustain a strong physical retail presence, which in turn will allow us to protect jobs and continue to provide great product and service to our customers. Prior to the outbreak of the pandemic we were seeing increased demand for AllSaints in every part of the world in which we operate, and during lockdown we have continued to reach new customers via our online channels. The commitment of our global team and the support of our vendors has been fantastic throughout this exceptionally challenging period. As a result, despite the sudden and adverse impact that COVID-19 has had on our sales and our short-term outlook, we remain confident in the long-term prospects for our brand.”
AllSaints is being represented by Kirkland & Ellis International in the U.K, Kirkland & Ellis LLP in the US, and Blake, Cassels & Grayson LLP in Canada.
The CVA nominees are Richard Fleming and Mark Firmin of Alvarez and Marsal.
Known creditors of the companies have today been contacted by email, or post where necessary. Any creditor that has not received an email can contact the CVA nominees to submit their claim and give voting instructions / pre-register to attend the meetings of creditors to be held on 3 July 2020 (ASUSA) and 6 July 2020 (ASRL):
- Creditors of ASUSA should email INS_ALLUSA@alvarezandmarsal.com
- Creditors of ASRL should email INS_ALLUK@alvarezandmarsal.com
Rob Greening / Sam Austrums
Notes to editors:
AllSaints is a global contemporary brand that is headquartered in East London and designs full collections of womenswear, menswear and accessories. AllSaints curates every aspect of the brand experience in-house, from store design and construction to the allsaints.com web platform. The brand has directly operated stores, concessions and outlets across the UK, Europe, North America and Asia. In addition, in recent years the brand has enjoyed success in developing non-retail activities around the world, including new wholesale business, licensing income and franchise partnerships. Founded in 1994, AllSaints has approximately 3000 employees across the world and has 255 directly operated stores, franchises, concessions and outlets across 26 countries.