Beales seeking rent reduction on loss-making stores

Another department store chain has announced plans to enter into a company voluntary arrangement, less than a week after British Home Stores announced similar proposals.

The 29-store Beales chain said it would use the arrangement to negotiate with landlords of loss-making stores, seeking either a rent reduction or an exit from the location.

Beales said the decision had been made to ensure its long-term viability, and added that its relationship with suppliers and concessionaires would not be affected.

"Most of Beales' stores are profitbale, including our main store in Yeovil, which is unaffected by the proposal," said chairman Stuart Lyons.

"However, a minority of our stores lose money because leases agreed some years ago are no longer sustainable due to changes in the economy and local conditions," he added.

Lyons said the legacy leases had been dragging on the group's financial health.

One of the group's largest landlords, the AIM-traded Panther Securities, said it would support the proposals. The company's largest supplier, Associated Independent Stores, had also agreed to support them.

Shareholders and other relevant parties were being called to a meeting on 24 March to approve the arrangement.

Beales, founded in 1881, was a listed company until April last year, when it was taken private by Andrew Perloff and his family interests.

On Friday, British Home stores announced it was seeking rent reductions on 40 of its stores, as well as restructuring its store management, in its own company voluntary arrangement.