Magnet Kitchens proposes CVA to close 15 stores, cut property costs

Magnet Kitchens has proposed a company voluntary arrangement that would close 15 underperforming stores as the retailer seeks to reduce legacy property costs and return the business to sustainable profitability.

The restructuring would affect 13 retail showrooms and two trade outlets, representing about 9% of Magnet’s 159-store estate. The remaining 144 locations would continue trading as normal, while customer orders linked to stores marked for closure would be transferred to the nearest alternative branch.

Natasha Harbinson, Will Wright and Chris Pole of Interpath are overseeing the proposed CVA, which remains subject to creditor approval. If approved, the arrangement would allow Magnet to compromise or restructure liabilities associated with parts of its property portfolio without placing the wider operating business into administration.

The stores proposed for closure are in Andover, Birmingham Minworth, Blackburn, Bridgwater, Brighton, Colwyn Bay, Dorking, Farnborough, Ramsgate, Stirling, Stockton, Watford and Weymouth, together with trade branches in Romford and York. Magnet has not disclosed how many employees could be affected, but said it would offer alternative roles where possible.

The CVA comes less than six months after funds managed by Alteri Investors acquired Magnet and other UK kitchen brands from Swedish manufacturer Nobia. The transaction returned the business to UK ownership after more than two decades and included Magnet’s manufacturing operations in Darlington.

At the time of the acquisition, Magnet said it had returned to quarterly profitability, with consumer like-for-like sales up 5%, average order values more than 12% higher and its business-to-business pipeline up 34% year over year. The company nevertheless said its historic property footprint and cost base continued to weigh on its recovery.

Chief Executive Officer Sophie Rose said the restructuring would allow Magnet to address property costs that were no longer sustainable while protecting the stronger parts of its estate.

The proposal continues Magnet’s move toward a more asset-light retail model, including greater use of smaller-format showrooms, while preserving its manufacturing base and operations across retail, trade and business-to-business markets. Magnet said customer orders remain a priority and are not expected to be disrupted by the process.