Wednesday 18 September 2019

Owner of high street shoe chain Office confirms talks with lenders

Truworths is seeking to restructure the footwear retailer’s debt.

Shoe chain Office has been hit by difficult trading conditions (Andrew Milligan/PA)
Shoe chain Office has been hit by difficult trading conditions (Andrew Milligan/PA)

By Alys Key, PA City Reporter

The owner of footwear chain Office has confirmed it is in talks with lenders over its debt, after it was hit by the tough conditions on the UK high street.

Truworths, a South African retail company which is listed on the Johannesburg stock exchange, said in a statement that it is looking at options for restructuring £45 million of debt racked up by the shoe shop.

With a significant portion of the debt coming to maturity at the end of next year, Truworths has appointed Alvarez & Marsal as well as Deloitte to advise on talks with lenders.

The company added that Office and the UK more generally is expected to continue experiencing “a difficult trading environment in the medium term”.

According to a Sky News report on Monday, advisers have also been instructed to draw up plans for a Company Voluntary Arrangement (CVA), the controversial insolvency mechanism used by businesses such as Debenhams and Arcadia to shutter stores and seek rent reductions.

However Truworths did not comment on the potential CVA and there is no certainty that one will be launched.

Truworths acquired Office in 2015 for £256 million from private equity firm Silverfleet Capital.

In its most recent accounts, Office posted a near-40% dip in pre-tax profits to £14.5 million for the 12 months to July 1 2018.

It also lost £700,000 in the administration of House of Fraser, where it operates concessions.

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