Dune launches CVA proposal, seeks turnover-based rents
Footwear retailer Dune has launched a CVA proposal and is seeking turnover-based rent agreements for a number of its shops. KPMG is overseeing the process.
The move was widely expected following a year in which the previously buoyant retailer has seen its shops forced to close for extended periods of time, as well as lower footfall when they reopened and the footwear category underperforming overall.
The almost 30-year-old company is privately owned by founder and CEO Daniel Rubin and operates 43 stores, as well as 175 concessions. It employs around 1,200 people.
While some of those stores could be in danger of closure, the company isn't planning to axe any at present if it can push it CVA proposal through. We'll know whether it has been successful later this month with voting on the CVA due to end on February 25.
Rubin said that before the pandemic, “the business was trading robustly, but the resulting lockdowns have had, and continue to have, a severe financial impact”.
He added: “We are profoundly grateful for the support shown by our key stakeholders since the start of the pandemic, but with so much uncertainty still surrounding the outlook for non-essential retail, we’re now in a position where we need to seek additional support if we are to protect our business. The CVA provides us with much-needed flexibility so that we can emerge on the other side of this crisis in the best shape possible.”
And the chance of an eventual (and hopefully swift) recovery could help the company as it works to convince landlords to agree to change its rental model. Many companies that have launched CVAs had been struggling even before the pandemic, but with the prospects of Dune being able to get back to health as circumstances normalise, landlords might be more prepared to agree to its terms.
Rubin insisted that the company remains committed to physical retail, “and indeed, in the longer term, our strategy is to grow our high street presence and adapt our business model with our concessions partners”.
Also in the footwear sector, Clarks saw its own CVA proposals being approved in December.
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