- Huw Hughes
Footwear retailer Office is reportedly mulling a company voluntary agreement (CVA).
The company has appointed advisory firm Alvarez & Marsal (A&M) to draw up a CVA plan which could see the closure of some of its roughly 100 UK stores, Sky News reports. It is unclear whether any of the retailer’s overseas stores in Germany and Ireland would close as part of the plan. However, sources told Sky a CVA wasn’t definite, and the company could explore different restructuring options.
Deloitte has reportedly also been brought in by Office’s lenders to advise on options.
A&M is expected to finalise a restructuring plan for the retailer in the coming weeks.
Kate Ormrod, lead retail analyst at leading data and analytics company GlobalData, believes that a lack of differentiation could be to blame for Office’s troubles. She said in a statement: “Office has been outshone by both multichannel and online rivals in the form of JD Sports and Asos, with range overlap the primary reason for the specialist’s difficulties, reducing its top of mind appeal among its core youth customer base and resulting in increased discounting. With Footasylum now under JD Sports’ wing, the pressure will only grow.
Ormrod continued: “Office has also struggled as leading sports footwear brands such as Nike and Adidas refocused on their retail operations and scaled back third party distribution on key lines. This has left its own brand offer exposed – with a need to better justify prices via investment in quality and design. With online already accounting for 33 percent of its global retail sales, and the channel not yet fully exploited, a leaner store estate is a must to drive its recovery.”
Photo credit: Office Shoes, Facebook