Monsoon Accessorize offers landlords a share in profits as part of CVA deal
Monsoon Accessorize is offering landlords a share in future profits of the business in exchange for approving a CVA deal that would enable it to cut the rent bill across its 270-store estate.
The chain's founder Peter Simon is said to be offering the profit share in exchange for £10m worth of rent cuts. He has also pledged to invest up to £34m in the business to safeguard its future.
Simon had delayed launching his CVA bid while he waited to see the outcome of Arcadia's vote, which took place last week and was approved following a week-long delay during which Sir Philip Green's company had to make a number of further concessions to secure landlords' backing. The Arcadia deal involves the closure of 23 stores (a further 25 are being closed via a separate insolvency procedure) and rent cuts on a further 200 stores.
Speculation rose that Simon might be obliged to offer a stake in his business to landlords after Arcadia was required to hand over 20%, which could be cashed in if the company is sold. Simon, who founded the business in the 1970s, was said to be reluctant to agree to the same and the profit share appears to the compromise.
In order for CVAs to be approved, 75% of shareholders by value need to approve the deal and a vote is expected on the Monsoon Accessorize deal next month. It is understood that the business is less reliant on the landlords approving the deal than Arcadia had been given that other creditors, such as clothing suppliers, have a larger share of the vote.