Troubled Tottenham Court Road retailer Micro Anvika's short-term future is looking more secure after suppliers gave its proposed rescue package the thumbs up.
The move came at a cost, however: the firm has shuttered more than half its stores and laid off more than 60 per cent of staff in a bid to convince creditors, owed £2.7m in total, that it could once again become an economically viable enterprise.
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Biz advisor Re10, which Micro Anvika appointed last December to explore whether it could turn around operations, held a meeting of creditors on 26 April. The Company Voluntary Arrangement (CVA) was approved by 84 per cent of those present - more than the 75 per cent needed to green light the deal.
Gary Rupping, manager at Re10, told Channel Register creditors can expect to see a minimum of a 32-pence-on-the-pound return on their debts over the next five years, which he said was preferable to the other alternative - insolvency.
"The directors tried to avoid going into administration and wanted to work with suppliers to get to this stage," he said. "They looked at the operating structure and were as ruthless as they could be in cutting costs."
The new look Micro Anvika, which started life in 1984 and at its peak was turning over more than £50m a year, will operate out of two premises in London's Tottenham Court Road and one in Newcastle, and will continue to run a mail-order biz.
Rupping said the retailer had closed four stores - three in London and one in Surrey - and the headquarters based in the capital. "It has gone from 140 employees to around 50," he confirmed.
The firm also lost out in the bidding to renew its concession contract with Harrods, as Dixons Retail had secured the site.
Staff have taken a salary cut and a share scheme is being finalised. The directors Atul Patel and Ramesh Gohill are now drawing a salary of £20,000 a year between them, said Rupping.
"Redundancy has been very difficult for all involved," he said. "The business was built over 25 [plus] years, the directors are very passionate and have done everything humanly possible to save it".
Micro Anvika had its credit insurance removed by jittery indemnifiers last year and Rupping confirmed the company continues to trade with suppliers on a "cash with order" basis.
He conceded retail is a "tough place" to be but claimed the remaining operations are profitable and suppliers could see a better return on their debts if the bottom lines improves. ®