70 per cent rent cut sought for King’s Lynn store

Beales are asking landlords to accept substantially reduced rent payments for stores including its branch in Lynn
Beales are asking landlords to accept substantially reduced rent payments for stores including its branch in Lynn
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The operators of a Lynn department store have called for landlords to reduce their rent or take back the premises altogether.

The Beales Department Store group has announced plans to seek a Company Voluntary Arrangement (CVA), through which the landlords of loss-making branches will be asked to re-structure their lease agreements or repossess the building.

The Lynn store is one of 14 where the company are seeking agreement to pay just 30 per cent of current rent charges for 10 months, while talks take place on new arrangements.

Creditors will be asked to vote on the proposal at a meeting on March 24, but the company says its main supplier and largest landlord are backing the plan.

Group chairman Stuart Lyons said: “Most of Beales’ stores are profitable and are unaffected by the proposal,

“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. Unfortunately, our store in King’s Lynn is one of them.

“We have been in discussion with our landlord and hope we will be able to agree a new rent with him.

“In the meantime, we will continue to trade as normal until our current lease expires in December 2016.”

Two supervisors have been appointed to oversee the discussions on the CVA.

One of them, Rob Croxen, a restructuring partner for auditors KPMG, said the company had been hampered by the leases agreed several years ago.

He said: “This CVA seeks to strike a balance which provides a fair compromise to the landlords, while allowing the viable part of the business to move forward.

“It’s particularly important to stress that none of the stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full, something we know is of critical importance to landlords.”