CVA's (Company Voluntary Arrangements) are a nice idea in principle: If a company has run out of cash and is staring bankrupcy in the face then rather than call in the administrators and shut up shop (in which event everyone looses generally), the company can negotiate a deal with it's creditors and subject to certain conditions continue to trade. JJB finds itself in this position for the second time in two years and is seeking a CVA agreement with it's creditors - most notably it's landlords. The proposed CVA is likely to release JJB from some long leases signed on retail premisis, and allow for some rent reductions on others - the assumption is that the landlord should be happy with some rent rather than the alternative of none at all.
But, the fragile state of JJB has been the subject of comment on here previously. It's competitors are performing well, but yet JJB has repeatedly sought further support from the banks and it's shareholders. When will the support stop and people realise that this is simply a fundementally poorly run business and pull the plug. With two CVA's in two years there are some real issues around fairness of competition. JJB is able to downwardly negotiate rents and get out of contracts that it willingly entered into while it's competitors who have managed their businesses with greater competance have no such advantage... Fair competition??
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