Summary
When a national bed retailer saw profits turn into multi-million-pound losses and creditor pressure intensified, McTear Williams & Wood was appointed to deliver a complex restructuring and guide the business through a company voluntary arrangement (CVA).
This case demonstrates how decisive action, creditor engagement and experienced leadership can preserve the viable core of a retail business in the face of a challenging trading climate.
- Service provided: company voluntary arrangement (CVA)
- Sector: retail (home furnishings/beds and mattresses)
- Location: East Anglia
- Team members involved: Andrew McTear
The challenge
Founded in 2004, the national retailer grew from a single store in Norfolk into a major UK retailer, with 25 stores stretching from York to the Isle of Wight. For many years, the business was profitable, but by the year ending March 2018, performance had shifted dramatically:
- A £1.1m profit became a £2.6m loss
- Like-for-like sales in April–May fell by 15%
- Consumer confidence weakened
- Retail footfall declined across the sector
These pressures intensified rapidly, creating an urgent need to reassess the cost base and store footprint. By June 2018, the directors had identified which stores remained profitable and strategically important and which stores were a drain on the business. Their goal was clear: avoid liquidation, protect the core business, fulfil customer orders and prevent creditor value being destroyed.
However, they needed specialist restructuring support to:
- Reduce fixed overheads across the retail estate
- Close large loss-making stores
- Respond to creditor pressure
- Support over 130 at-risk employees
- Manage customer expectations and outstanding orders
- Stabilise the remaining trading stores
- Find a route to rescue rather than terminal insolvency
The business confirmed that 14 stores would close and a total of 136 jobs were placed at risk.
With the situation deteriorating quickly McTear Williams & Wood were quickly appointed.
Our approach
Andrew McTear led the process to assess options and propose the most viable rescue route. A company voluntary arrangement (CVA) was identified as the mechanism capable of allowing continued trading while repaying a proportion of debts over time.
Key steps included:
- Preparing the CVA
We prepared a detailed CVA proposal under the Insolvency Act 1986, setting out:
- A sustainable restructuring plan
- A roadmap for store closures
- Creditor repayment proposals
- Cash-flow forecasts and trading projections
- Actions required to protect ongoing operations
- Creditor engagement
We worked closely with major creditors to build understanding and support for the proposal. At the CVA meeting on 6 July 2018, 84.75% of creditors voted in favour – securing approval and enabling the rescue plan to proceed.
- Retail estate restructuring
The CVA provided the legal framework needed to close 14 underperforming stores in an orderly manner. This included liaising with landlords, managing lease terminations and overseeing the practical closing-down sale process.
- Employee support and redundancies
More than 130 employees were affected. We guided the business through redundancy consultation, statutory processes, and access to the Redundancy Payments Service and ensured all staff received appropriate support.
- Protecting the remaining business
With the stronger-performing stores and online operations saved the directors set about rebuilding the business.
The outcome
The national retailer’s CVA was formally completed on 23 March 2023, marking the end of a multi-year turnaround effort.
Despite more than 100 necessary redundancies and the closure of over half the retail estate, the CVA:
- Preserved the core business
- Prevented liquidation
- Protected a significant online trading value
- Maintained employment across remaining stores
- Enabled an orderly, responsible restructuring
- Provided creditors with a better return than a formal insolvency process
At the time, a company spokesperson noted:
“Whilst optimistic about the future, necessary changes will see job losses exceeding 100 employees. This decision has not been taken lightly, but it’s an essential step towards a leaner, more sustainable business.”
The case is a good example of how a CVA can give a core viable retail business the space it needs to adapt to market pressures, reduce overheads and rebuild stability.
Supporting long-term business recovery
At McTear Williams & Wood, we understand that retail businesses often face volatility driven by consumer demand, rising costs and external market shocks. A CVA can be a flexible rescue tool when used at the right time and with the right strategy.
If your business is under pressure but has a viable core, our restructuring specialists can help you assess your options and plan a realistic route to recovery.