Magnet Group has announced proposals for a Company Voluntary Arrangement (CVA) as it looks to address historic property costs, strengthen the business and support its return to sustainable profitability.
The proposed CVA is focused on Magnet’s store estate and is intended to enable the business to work with creditors, including landlords, to reduce property costs that are no longer sustainable.
As part of the proposals, 15 underperforming Magnet stores are expected to close. The company said the majority of its 159-store estate will not be affected and will continue trading as normal.
The proposals, which will be overseen by Natasha Harbinson, Will Wright and Chris Pole from Interpath, remain subject to creditor approval. If approved, the CVA will provide a structured framework to address the business’s property cost base and create a stronger platform for future growth.
Magnet said colleagues affected by the proposals will be supported throughout the process, with suitable alternative roles offered wherever possible.
The company added that customers will not be impacted by today’s announcement, with all existing orders continuing as planned. Where a customer’s local store is proposed for closure, their order will be transferred to the nearest alternative Magnet store to ensure continuity of service.
In recent years, Magnet Group has implemented a range of measures aimed at improving business performance. These have included reviewing its store portfolio, investing in its smaller-format stores, closing selected locations and adapting its operating model.
Despite these initiatives, the company said elements of its historic property estate and associated costs continue to place pressure on the business and its return to sustainable profitability.
Sophie Rose, CEO of Magnet Group, said: “This is a difficult decision and not one we have taken lightly, particularly where colleagues may be impacted.
“But taking this action now is the right thing to do for the long-term health of Magnet Group. It allows us to deal with property costs that are no longer sustainable and protect the stronger parts of our estate.
“We have a strong brand, talented teams, successful customer relationships and a long-established manufacturing base that will continue to underpin the business for years to come. By removing costs that are holding us back, we can focus more of our time, energy and investment on the areas where we see the greatest opportunity.
“I am confident these proposals will help Magnet Group build a stronger, more resilient business that is better placed to serve customers, support partners and return to sustainable profitability.”
