Almost all of British Home Stores' (BHS) creditors have voted in favour of a deal which is likely to save the company in the short-to-medium term.
Under the plans, BHS will continue to pay a 50-75% reduced , but guaranteed, rent on 47 of its loss-making stores. Its most profitable stores will continue to pay rent at current levels, and 40 of its least profitable stores will continue at current rent levels for at least 10 months as negotiations on a reduction continue.
BHS chief executive Darren Topp said: "This gives BHS the opportunity to move forward.
"It is a tough time for retailers across the UK with huge structural challenges faced by all, however, we have a very credible plan to return BHS to growth and profitability and a revitalised British Home Stores will emerge as we accelerate our turnaround plans."
The plans also include the sale of the lease on its Oxford Street flagship store for around £30 million.
With debts of £1.3 billion, a pensions deficit of more than £570m and a period of losses that has lasted seven years, BHS would have likely fallen into administration without this deal being agreed. However, the retailer still needs to raise around £100m to continue trading beyond tomorrow (25 March).
Will Wright, restructuring partner at KPMG, who oversaw the Company Voluntary Agreements (CVAs) needed for BHS to stay afloat, said: "Today's 'yes' votes enable BHS to tackle the issue of an unsustainable lease burden which was weighing heavily on the business.
"While together, the two CVAs comprise only one element of BHS's plan to turn around its fortunes, they are a critical cog in the mechanism that will put the business in a stronger operational position. The proposal process has given both the company and its creditors the opportunity to agree a compromise that is mutually acceptable."