Xtra-vision examiner wins rent reductions
Published 01/07/2011 | 05:00
THE examiner at retail chain Xtra-vision is understood to have negotiated substantial rent reductions at about half the firm's 140 outlets in the Republic as efforts continue to place the business on a sounder financial footing.
In the High Court yesterday, the examiner of the company, David Hughes of Ernst & Young, succeeded in having a further two leases held by Xtra-vision repudiated. That terminates the lease agreements.
Last week, four lease agreements were repudiated and it is believed that the examiner will seek to have close to 20 repudiated. The majority of those leases are held by Xtra-vision on stores it no longer trades from but where it still has to pay high rents. In some instances it has managed to sub-lease the outlets, but doesn't generate enough income from those agreements to cover its own rent bill. The leases can only be repudiated if the court finds them to be onerous.
Xtra-vision employs about 1,300 people and has a total of 180 stores on the island of Ireland. Mr Hughes was formally appointed examiner of the group in early May.
The chain is headed by Peter O'Grady-Walshe and controlled by investors including Pageant Holdings -- which is owned by businessman Nicholas Furlong and his family -- and NCB Ventures, which is backed by the Ulster Bank Diageo Venture Fund. They acquired the business from US chain Blockbuster in 2009. They've pledged to invest a further €6m in Xtra-vision as part of a court-approved rescue plan.
The inability of Xtra-vision to reduce its rent bill -- €10m in 2010 -- was cited as one of the main reasons for the group entering examinership.