One of Britain’s largest chains of hair salons has called in administrators, thwarting a bid by prominent high street landlords to overturn a financial restructuring and putting more than 1, 000 jobs at risk.
Sky News has learnt that Regis UK, which was sold by its US parent to a private equity firm in 2017, was placed into an insolvency process on Wednesday.
The company trades under the Regis and Supercuts brands in the UK.
The move to appoint administrators calls into question the future of its 220 outlets in Britain and the fate of roughly 1, 200 employees, although retail industry sources said they expected a buyer to be found.
Sources said that Deloitte had been appointed as administrator to the UK business ahead of a legal challenge to Regis UK’s Company Voluntary Arrangement (CVA), an agreement with creditors that would have involved steep rent cuts at many of its sites.
Last December, landlords including British Land and Hammerson filed an appeal to challenge Regis’s CVA in the courts.
The proposed restructuring, which was approved by the required majority of creditors in October 2018, would have involved rent cuts of up to 100% at 100 of its sites.
None of Regis UK’s sites are being closed while Deloitte explores options for the business, according to insiders.
The move to put the business into administration underlines the fragile relationship that exists between major landlords and retail tenants as dire trading conditions have forced chains to seek compromise agreements with creditors.
Store owners have become dismayed by the deluge of CVAs, bringing the fate of Arcadia Group, Sir Philip Green’s Dorothy Perkins- to-Top Shop empire to the brink of collapse earlier this year when they threatened to block the tycoon’s rescue plan.
British Land also mounted a legal challenge to the financial restructuring of Monsoon Accessorize, the fashion retailer , *** subsequently settled.
Regis UK could not be reached for comment, while Deloitte declined to comment.
********
GIPHY App Key not set. Please check settings