Footwear retail group Stylo today (10 February) warned it will go into administration with the potential loss of up to 5,400 jobs if its creditors fail to back plans to turn the business around.

The company's creditors and landlords are due to vote on the Company Voluntary Arrangement (CVA) proposals on Thursday, which include proposals to restructure its rental liabilities.

If they fail to vote in favour of the scheme, the business will be put up for sale or liquidated - b oth of which will result in the immediate closure of a "significant number" of its 400 stores.

The move comes after Stylo was forced to put its Stylo Barratt Shoes, Stylo Barratt Properties, Priceless Shoes Properties, Barratts Shoes Properties and Comfort Shoes subsidiaries into administration last month.

Stylo itself, however, did not go into administration, but suspended trading in its shares on London's AIM Exchange.

Chairman and chief executive Michael Ziff said the CVAs "represent a far better outcome for Stylo, our employees, our pension fund, our creditors and landlords than the alternative scenarios." 

Under the scheme, the retailer will pay rent for six months on all properties. It also says landlords will be able to find new tenants for each site, with Stylo having the right to match the rent.

In January, the Ziff family said it would make "substantial" further funds available to the group if requested to do so by the board.

The company said it has attempted to return the business to profitability by reducing costs, closing underperforming outlets, selling businesses, improving its management team, reducing stock levels and developing new formats.

However, Stylo's board went onto say that trading conditions in the retail sector have "deteriorated markedly", and that it did not anticipate any short-term improvement.