The Ann Summers chief executive has accused some retail landlords of “burying their heads in the sand” by ignoring the crisis on the high street, after several refused to accept lower rents to support the chain.
The sex toys and lingerie specialist has been struggling during a high street downturn. The Guardian revealed in May that it wanted to reduce its rent.
Jacqueline Gold said the past year had “been the toughest I can remember in my 38 years in the retail business”. She set out Ann Summers’ position in a frank column in Retail Week.
Maplin, Toys R Us and Jacques Vert have all collapsed in recent months, but several retailers and restaurant groups are facing financial problems and are trying to close stores or negotiate rent cuts.
Gourmet Burger Kitchen: The upmarket burger chain wants to close 17 of its 85 restaurants via an insolvency process known as a company voluntary arrangement (CVA)
House of Fraser: The department store chain is expected to close about 12 stores after being bought out of administration by Mike Ashley. It had agreed a CVA under which 31 stores were to close, but this lapsed on administration.
Homebase: The DIY chain is closing at least 42 stores after completing a CVA organised by new owner Hilco. The restructuring expert bought the DIY chain for £1 from Australia's Wesfarmers who botched an attempt to bring its Bunnings chain to the UK.
Poundworld: The discount retailer has closed all its 355 stores, with the loss of 5,100 jobs after falling into administration in June.
Cau: The owner of the Gaucho and Cau steakhouses fell into administration in July leading to the closure of all 22 Cau restaurants, with loss of 750 jobs. The groups lenders have since bought the 16 Gaucho outlets.
Mothercare: The chain is closing 60 of its 137 outlets after agreeing a CVA in May. Additional closures in July mean 900 jobs will be lost.
Carluccio's: The Italian chain secured a CVA to close 30 of its 99 restaurants in late May.
New Look: The chain is closing 85 stores in a restructuring plan announced earlier this year. Its chairman, Alistair McGeorge, said the future of a further 39 stores was in doubt as talks with landlords continued.
Carpetright: The retailer obtained a CVA in April to close 92 of its 409 UK stores in September with the loss of about 300 jobs.
Prezzo: In March the Italian-themed restaurant group secured a CVA to close 94 of its 300 restaurants, with the loss of 500 jobs. Rent cuts were agreed on a further 57 locations.
Jamie’s Italian: The chain closed six locations in 2017 and this year agreed a CVA to close about a third of its 35 loss-making outlets.
Byron: The upmarket burger chain is closing up to 20 of its 67 restaurants after a CVA agreed in January.
Debenhams: The under-pressure department store chain has said it could close up to 50 of its 165 stores stores and wants to get rid of space at 30 more by bringing in gyms and other services.
M&S: The high street stalwart wants to close 100 outlets – a third of its main stores by 2022 as part of a 'radical transformation' plan.
After talks with landlords, Gold said the company had successfully negotiated new terms for almost all the chain’s stores – 95 out of 100 – but that it might have to use a company voluntary arrangement (CVA) to deal with the remaining five outlets.
A CVA is a form of insolvency that enables companies in difficulty to close unwanted stores and reduce rents on others.
There had been a “fundamental shift in the retail property”, Gold said, and while the vast majority of landlords “live in the real world” others continued to “bury their heads in the sand and pretend historic rental levels are sustainable in future”.
“I continue to hope that the remaining landlords will come to the table and agree to sensible new terms that mean our stores can continue to trade,” she added.
Over the past two years numerous struggling retailers and restaurant chains, including Mothercare, New Look, Debenhams, Giraffe and Byron, have used CVAs to restructure their finances after being squeezed by rising costs at a time when consumers are cutting back on spending.
Sales at Ann Summers were flat at about £110m in the year to 30 June, but a £3.3m loss had replaced the previous year’s £2.9m profit, according to the most recent accounts filed at Companies House. The plunge into the red was blamed on higher sourcing costs, business taxes and investment in a new look for the 49-year-old brand.
Ann Summers, which also organises 7,000 Tupperware-style parties a week for women to buy its sex toys and nightwear, has also been affected by the success of online rivals such as Lovehoney. The Bath-based website has grown rapidly and is close to overtaking its bricks-and-mortar rival in sales.
Gold said: “We would be mad not to consider all options, including a CVA of that 5% of stores, because we cannot allow the future success of our business to be jeopardised by the handful of landlords who won’t come to the table.”
