A UK kitchen giant has announced it will shut 15 stores across the country in a bid to avoid going bust. Magnet Kitchens, which runs more than 150 showrooms across the UK, has launched an emergency rescue plan to cut crippling property costs by closing “underperforming” locations.
Magnet has launched a Company Voluntary Arrangement (CVA), a UK insolvency procedure which allows struggling but still viable companies to repay a portion of their unsecured debts over a fix period – often three to five years – in order to avoid going under. Unlike liquidation, a CVA lets directors stay in control while the business continues to trade and protects against creditors’ legal action. In Magnet’s case, the CVA proposals will be overseen by restructuring experts Natasha Harbinson, Will Wright and Chris Pole from advisory firm Interpath – but they still need to be approved by creditors before they can go ahead.
Sophie Rose, chief executive of Magnet Group, described the process as a “difficult decision,” especially given that staff could lose their jobs.
She said: “This is a difficult decision and not one we have taken lightly, particularly where colleagues may be impacted.”
However, she insisted the move was essential for the brand’s survival: “Taking this action now is the right thing to do for the long-term health of Magnet Group. It allows us to deal with property costs that are no longer sustainable and protect the stronger parts of our estate.
“I am confident these proposals will help Magnet Group build a stronger, more resilient business that is better placed to serve customers, support partners and return to sustainable profitability.”
- Andover, Hampshire
- Birmingham Minworth, West Midlands
- Blackburn, Lancashire
- Bridgwater, Somerset
- Brighton, East Sussex
- Colwyn Bay, Wales
- Dorking, Surrey
- Farnborough, Hampshire
- Ramsgate, Kent
- Romford Trade, Greater London
- Stirling, Scotland
- Stockton, County Durham
- Watford, Hertfordshire
- Weymouth, Dorset
- York Trade, North Yorkshire
The majority of the brand’s 159 stores will not be impacted by the restructuring and will continue to operate as normal.