A successful retail outlet looking to restructure was hit with further difficulties following the COVID-19 pandemic, One80 engaged with landlords to ease the financial burden and renegotiate leases to minimise overheads.

The challenge

Our client had 55 UK retail outlets comprising of 15 subsidiary companies which were operating under a range of brand names. They held various leases all over the country which sat within each subsidiary business and were primarily looking to restructure and slim down their operations whilst disposing of poor performing retail sites. One80 were initially introduced to help with the restructure but following the COVID-19 pandemic had to negotiate heavily with landlords.

The solution

We initially advised the board pre-COVID with a view to restructure the group which would have included a range of solvent and insolvent exits. In addition, the company was keen to dispose of poor performing outlets and restructure the remaining group. A strategy had been put in place and proceedings were underway.

As the COVID-19 pandemic hit, the company experienced a significant business downturn in sales as footfall dropped dramatically following the threat of a national lockdown. The company took quick action and all sites were closed with the majority of the workforce placed on furlough leave. As the group position further deteriorated, it was vital that our strategy was revised so as to preserve the operations as best we could, given the uncertain circumstances.

Following previous discussions with landlords prior to the pandemic regarding the various commercial leases the company held, they were offering little leeway in terms of exiting the agreed lease period. The impact of COVID had changed their position but the landlords were still reluctant to offer any form of discount other than 1, 2 or 3 month payment holidays on rent. We entered into further negotiations explaining the implications on both sides and were able to successfully renegotiate the leases on reduced terms.