Chipsworld instigates CVA to protect company and employees
Action taken by specialist retailer to "nullify the ravages of the credit crunch"
Specialist retailer Chipsworld has initiated a Company Voluntary Arrangement following financial strains put on it by the recession.
The action was decided upon in order for the company to best protect itself, as well as its customers, suppliers and employees, it has said. The arrangement offers a protective legal framework to any eligible company, giving it time to repay all agreed debts under a strict, agreed timetable.
"All our suppliers have been aware of this situation for many weeks and absolutely nothing has changed regarding the situation since then," said the company in a statement.
The CVA was instigated in order to "nullify the ravages of the 'credit crunch' and the recession which has hit the industry over the last 18 months", it added. The company has also run up "significant" HMRC debts, which it cites as the primary reason for the CVA's implementation.
"Since suppliers have been aware of the situation we have been bowled over by the support offered and the esteem in which the company is held.
"Chipsworld Ltd believes it has taken responsible action towards the situation which has arisen over the last 18 months and in order to protect its customers, suppliers, employees and itself it needed to act this autumn."
The action affects only Chipsworld Ltd and its company stores while Chips franchise stores and chipsworld.co.uk will be untouched by the action. No Chips store will close as a direct result of the CVA, said the company.
Meanwhile, joint managing directors Don McCabe and Nik Agar will continue to run the business, which has been trading for almost 25 years.
"They intend to weather this storm and will do everything in their power to ensure Chipsworld Ltd continues to trade for another 25 years," said the company.