Blue Inc owners explore deal that could lead to closing loss-making stores
The owners of struggling retail chain Blue Inc are exploring a restructuring deal that could see it jettison a host of loss-making stores.
The chain, which has 127 stores, has instructed Begbies Traynor to undertake a company voluntary arrangement (CVA), a process that would allow it to close unprofitable stores, see rents reduced and put the business on a firmer financial footing.
Blue Inc is struggling under losses and is required to make debt repayments, as well as fork out for a hefty rent bill.
Peter Girt, managing director of Blue Inc, said: "In a challenging market it is vital that we ensure our operation runs as effectively and efficiently as possible as we drive the brand to continue to deliver great product, great service and great price.
"We believe this restructure will allow us to achieve this and protect the interests of our employees, creditors and suppliers."
If voted through by creditors, the move, which is part of a wider organisational restructuring, is expected to result in heavy job losses as stores are shuttered.
Alongside the CVA, the retailer also plans to drive further savings and shore up its capital base by outsourcing its warehouse and logistics operations.
Kirstie Provan of Begbies Traynor added: "We have been working closely with Blue Inc and consider that the CVA being proposed, alongside the wider operational restructuring process, will protect both the business and significant employment and will enable a platform to deliver long-term profitability.
"We have discussed the proposal with a number of key stakeholders and have received strong support."