Footwear retailer Dune has recently made an announcement regarding its plan to launch a Company Voluntary Arrangement (CVA) proposal. The purpose of this proposal is to negotiate turnover-based rent agreements for several of its stores. KPMG is overseeing this process. This decision comes as no surprise, as Dune has faced significant challenges over the past year. The company’s stores were forced to close for extended periods of time due to lockdown measures, resulting in reduced footfall. Additionally, the overall performance of the footwear category has been underwhelming, further impacting the retailer’s success.

Dune, which has been in operation for almost three decades, is privately owned by founder and CEO Daniel Rubin. The company currently operates 43 stores and has 175 concessions, employing around 1,200 individuals. While there is a chance that some stores may have to close, Dune is determined to maintain all of its locations if the CVA proposal is approved. The voting process for this proposal will conclude on February 25, with the outcome to be announced later this month.

Rubin expressed his gratitude for the support received from key stakeholders throughout the pandemic. However, he also acknowledged the significant financial strain that the lockdowns have placed on the business. With the future of non-essential retail still uncertain, Dune sees the CVA as a necessary step to secure additional support and safeguard the company. By implementing a CVA, Dune will gain the flexibility needed to emerge from this crisis in the strongest possible position.

Dune is hopeful that its potential for recovery in the near future will encourage landlords to agree to changes in the rental model. Unlike other companies that have pursued CVAs due to existing financial difficulties, Dune’s prospects for a comeback once circumstances normalize might make landlords more willing to accept its terms. Rubin emphasized the company’s dedication to physical retail and its plans to expand its presence on the high street, while also adapting its business model through partnerships with concessions.

In a similar fashion, Clarks, a prominent player in the footwear industry, had its own CVA proposals approved in December. These recent developments highlight the challenges faced by retailers as they strive to adapt to the rapidly changing business landscape. However, they also demonstrate the proactive steps being taken to ensure a secure future in the post-pandemic world.

Useful links (only when applicable):

1. KPMG Insights
2. Retail Gazette – Footwear News