Beales: Lower our rent or we’ll go into administration

Beales Department Store in the Rochdale Exchange Shopping Centre

Beales will today (Thursday 24 March) tell its landlords that unless they drastically cut the rent the company could fall into administration.

Rochdale Online reported earlier this month how the Rochdale Exchange store could be shut down after bosses signalled financial troubles and had bid for lower rent.

http://www.rochdaleonline.co.uk/news-features/1/business-news/101604/beales-signals-financial-trouble-and-bids-for-lowered-rent

A proposal is to be put before creditors this morning and shareholders in the afternoon, to resolve the issues with a CVA (company voluntary agreement).

The CVA proposal says: “If the CVA is not approved at the relevant meetings, it is very likely that the company and Beale Limited will no longer be able to trade as a going concern, which would result in the appointment of administrators.”

Beales chairman Stuart Lyons said: “Most of Beales’ stores are profitable. However, a minority of our stores lose money because leases agreed some years ago are no longer sustainable due to changes in the economy and local conditions.

“These legacy rents have been dragging the group down. This is a unique opportunity to restore the group to financial health.”

Shareholders and stakeholders will be called today (24 March) to approve the proposals. Landlords of the loss-making stores will be asked to reduce Beales’ rents or take the premises back.

Rochdale Exchange Shopping Centre has been invited to comment.