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 Topic: Discover Leisure shuts seven outlets
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02/6/2009 at 2:39pm
Location: Buckinghamshire
Outfit: VW Campers and Tents
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Caravan and motorhome firm Discover Leisure – with three main dealerships in the region – has closed two thirds of its branches and reported significant losses.
Interim results for the firm, which owns the former Barrons dealership in Darlington, employing 66 staff, showed losses before tax for the six months to March 1 of £9.5m.
The firm, which owned 16 branches across England and Wales, is to become a “leaner group” focusing on five of its larger sites, including Darlington, York and Birtley, near Chester-le-Street.
Along with Chorley, in Lancashire, and Delamere, in Cheshire, the five branches accounted for 60 per cent of the group’s revenues in the six months to March 1.
Yesterday, it confirmed that as part of a restructuring programme, it had shut seven outlets already, with a further three to close yesterday.
An outlet in Cardiff closed last year.
Seven of the closed properties are freehold, and will be sold.
Discover said the increase in losses, from £1.8m last year, was a consequence of a 39 per cent reduction in the market for new tourers and motor homes in the period and the need to liquidate excess stocks to generate cash in an oversupplied market.
Trevor Parker, chief executive of Discover Leisure, said: “Discover will continue trading through our five northern premier retail outlets and via our online shop, including our Darlington site at Burtree Gate that has enjoyed a tremendous start to our busy season.
“Our team at Darlington are very hard working and we look forward to continued success at this branch.”
Mr Parker said: “While we are currently enjoying a positive trading performance at the start of the high season, external pressures are such that certain areas of our business were not geared for growth or indeed survival and, as such, put the entire company at risk.
“National Caravan Council statistics continue to report that the overall market is significantly reducing year on year and, as a result, simply cannot sustain the current level of retail outlets.
“Store closures and redundancies are always regrettable, but this bold, pro-active action gives stability to our company and puts us in a better position to ride out the current recession.”
As part of plans for refinancing, the company is pursuing a company voluntary arrangement, a formal procedure under the Insolvency Act 1986, with the unsecured creditors of Signlease, a wholly-owned subsidiary of Discover, including HMRC.
The group has also agreed principal terms with both Royal Bank of Scotland and Bank of Scotland for revised facilities, including an eightyear term loan of £8m secured against the five remaining retail properties
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17/7/2009 at 11:06am
Location: Warrington
Outfit: None Entered
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Joined: 14/5/2009 Standard Member
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15/06/09 Read this article.
Creditors of troubled caravan business Discover Leisure have agreed to a company voluntary arrangement, allowing some breathing space from its debts while restructuring takes place.
The CVA was granted for the AIM-quoted company's main trading subsidiary Signlease Ltd at a meeting in Leeds today, representing the second deal KPMG has pushed through recently. Sports retailer JJB was the first plc to hammer out such a deal last month.Creditors settled for a deal which will see them get 22p in the pound back on their original investment, but this is far higher than the amount they would receive under a normal administration procedure, KPMG said.
Mark Firmin, restructuring partner at KPMG and CVA nominee said: 'I am very pleased that the CVA proposal has been approved by 99.7 per cent of the company’s creditors.
'This high level of support indicates that the proposal struck the right balance between meeting the needs of the company and those of its creditors, which are expected to receive a dividend of approximately 22p in the pound; significantly more than would have been available to them through an administration.'
The move allows the business to continue as a going concern to keep trading and to continue the restructuring it began some time ago, and offers some security to the 300 company employees.
Firmin added that there would be more corporate casualties across the entire spectrum of the leisure sector in the near future.
'We expect to see further fall out in the leisure sector in the UK over the summer. In spite of the growing trend for so-called 'stay-cations', consumers are pulling a tight rein on discretionary spending,' he said.
'This has far-reaching consequences on the financial stability of the many and varied businesses in the leisure sector, from hotels to caravan retailers.'
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