Why are CVAs popular among struggling retailers?

Retail is one of the sectors where CVAs are most frequently used, largely because they allow businesses to restructure onerous property leases. Many large retailers operate multiple sites with long-term lease obligations, and when trading declines, these costs can quickly become unsustainable. A CVA provides a legal mechanism to renegotiate rent terms, close unprofitable stores, and reduce overall property overheads while avoiding liquidation. High-profile retail chains in the UK have successfully used CVAs to survive downturns by focusing resources on profitable locations. For landlords, while a CVA may reduce rental income, it is often preferable to liquidation, which would leave them with vacant properties and potentially no income at all. Beyond property costs, CVAs can also restructure supplier debts and tax arrears, helping retailers stabilise cashflow and preserve brand value. This makes CVAs an attractive tool for retailers seeking to adapt to changing market conditions without losing their core business.