Focus DIY in bid to fight off administration

| August 24, 2009 | 0 Comments

Creditors of struggling DIY and gardening chain, Focus DIY, are expected to back a Company Voluntary Agreement (CVA) in a bid to prevent the company from collapse and protect 4,572 jobs.

Under the proposed deal, Focus will pay its creditors (the majority of which are landlords) a proportion of what it owes them, while leases for its empty stores will be bought off with two lump sums - the equivalent of six months’ rent.

According to the landlords, which include property companies British Land and Land Securities, the payout they would receive in the deal is less than the value of the leases, but it is more than they would get if the firm were allowed to collapse.

According to Focus’ chief executive, Bill Grimsey, the firm could be making treble what it is today if weren’t for the recession.

“The flexibility of our landlords will save thousands of jobs and that’s why we owe it to them to be wholly transparent in all our dealings,” explains Mr Grimsey.

Many companies have been struggling amid the recession but the downturn in the housing market has resulted in low demand at these types of stores.

Furniture retailers, in particular, have been hit hard with MFI collapsing late last year, while furniture and furnishings retailers including Ilva, Rosebys and Beds Direct have all gone bust.

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