There have been a number of high-profile Company Voluntary Arrangements (CVAs) this year including the likes of Carpetright, Mothercare, Carluccio’s and New Look.
Whilst on the face of it the rationale behind the CVA may be sound where businesses have genuine trading difficulties, some landlords feel CVAs are being abused in order to force through rent cuts and to get out of long-term leases.
Even some other retailers feel the same way including Next who are looking to insert a so called ‘CVA-clause’ into its property leases to lower its rents where store neighbours receive similar deals via CVAs. It will be very interesting to see how Next get on with this clause and how much power Next has to force through such changes.