BEALES has won the support of its creditors for a deal to slash its rent bill and potentially save the company from administration.

Its proposals for a company voluntary arrangement (CVA) were backed by 90 per cent of the votes cast at a creditors’ meeting in London this morning.

Beales had warned that the company could go into administration if it did not win support for the CVA, which drastically cuts the rent at 14 stores.

Beales had said the rents on the stores in question – which did not include Poole or the flagship Bournemouth branch – were “dragging the group down”.

Beales chairman Stuart Lyons said this morning: “This vote gives Beales a unique opportunity to restore the group to financial health.

“We are extremely grateful to our business partners for their overwhelming support.”

He added: “These legacy rents have been dragging the group down. Our landlords now have the opportunity to restructure them on equitable terms.”

The CVA proposal before creditors said: “If the CVA is not approved at the relevant meetings, it is very likely that the company and Beale Limited will no longer be able to trade as a going concern, which would result in the appointment of administrators.”

Nigel Beale, honorary president of the company, whose great-grandfather founded Beales in Bournemouth in 1881, said ahead of the vote: “I think we’ve all got our fingers crossed because it should put the company back on the right sort of footing.

“We have three particularly onerous leases on extremely high rents and I don’t think it’s any secret that if those particular properties were eliminated, the company would come back into profitability relatively quickly."

Beales proposed paying 30 per cent of the rent due on the shops in question for 10 months, while it renegotiates.

The CVA proposal adds: “Unsecured creditors (including landlords) will receive a greater return on the amount owed to them in the CVA than they would do if the company were to be subject to an administration.”

Beales, which has 29 stores across the country, was bought last year for just £1.2million by investor Andrew Perloff. It made pre-tax losses of £4.6m in the year ending November 2014.

The proposal said: “Since taking control in April 2015, the new management team has reduced headquarter and operating costs by more than £1m annualised, negotiated improved terms for suppliers and concessionaires and discontinued loss-making activities, including the non-productive transactional website.

“Product ranges have been reviewed, old stocks cleared and new brands introduced. A Back to Beales campaign has been launched in-store and through local media and the appearance of the stores has been enhanced.”

Beales only owns the freehold at three stores – Bedford, Kendal and Yeovil, along with a small warehouse in Bolton. It leases property adjoining all three of those stores.

All its other shops are leased, including the Bournemouth flagship, where the landlord recently submitted an application to turn the top four floors into 76 flats.

The “category two” sites which the company says are unviable unless rents can be slashed are: Abington, Bishop Auckland, Bolton Pad House, Bolton, Hexham, Keighley, King’s Lynn, Redcar, Rochdale, Rochdale Pioneer House, Saffron Walden, Winchester, Yeovil (Warehouse) and Yeovil (Wallis Store).