Jigsaw, the British fashion retailer, has received approval from its creditors for its Company Voluntary Arrangement (CVA) plan that aims to address its financial challenges. However, as part of the plan, the company will be closing 13 stores, which is slightly fewer than initially anticipated. These store closures, along with the transition of a significant number of remaining stores to turnover-based rents, highlight the ongoing challenges faced by Jigsaw even before the COVID-19 pandemic.

Even prior to the pandemic, Jigsaw was already facing difficulties in the retail industry. However, the closure of stores during lockdown and the slow return of consumers to physical stores after reopening have further exacerbated the company’s struggles. With a current total of 74 stores in the UK and approximately 900 employees, Jigsaw is now forced to make difficult decisions to ensure its survival.

Several stores in prominent and bustling locations, including Westfield London, Bluewater in Kent, Manchester, and Birmingham, are among those scheduled for closure. Despite these closures, Jigsaw remains positive about its future prospects. A spokesperson for the company expressed satisfaction with the acceptance of the proposal by the majority of creditors, emphasizing that it sets a solid foundation for the company moving forward. Additionally, they highlighted the company’s focus on its core business as a women’s British Heritage brand, especially in light of its upcoming 50th anniversary.

Will Wright, a partner at KPMG and joint supervisor of the CVA, emphasized the significance of the successful proposal for Jigsaw’s ability to navigate the current retail environment. He stated that it represents a vital step in the company’s overall assessment of its operations.

Jigsaw’s situation is not unique, as many retailers have been forced to close stores and adopt turnover-based rents through the implementation of a CVA. While this trend is not favored by landlords, who are already facing their own challenges, they often have no choice but to accept these arrangements due to the diminished demand for retail space, particularly in once-thriving covered malls and city centers.

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