AllSaints, the global contemporary fashion brand, is restructuring its store portfolio through CVAs in both All Saints Retail Limited (or “ASRL”) and its subsidiary AllSaints USA Limited (or ASUSA). 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 the further risk of retail closure. A small number of stores will close where the business is not feasible. Creditors will vote on the proposal at meetings on 3 July 2020 (ASUSA) and 6 July 2020 (ASRL).
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 the 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.”