Moss Bros appoints advisers ahead of possible CVA
Men's formalwear retailer Moss Bros is reported to have hired advisers from KMPG as a prelude to a potential CVA that may lead to some store closures.
The retailer, which was recently acquired by Crew Clothing Co owner Menoshi Shina, has been particularly badly hit by the COVID-19 crisis which has led to a the working from home revolution and the cancellations of social events throughout the summer.
Shina, using the Brigadier Acquistion Company vehicle, made his bid for Moss Bros in March, after the virus was declared a pandemic but before the UK entered lockdown.
He later attempted to pull out of the deal “on account of the impact the current health crisis on Moss Bros and related UK Government measures” however the Takeover Panel ruled that it must go ahead given the offer was made after a pandemic had been declared.
According to The Sunday Times the company would look to close some of its 125 stores and seek rent reductions on others as part of a CVA.
Such a move is likely to come under close scrutiny from the British Property Federation, which last week criticised young fashion retailer New Look for its CVA plan, which seeks to achieve zero rent on 68 stores and shift to turnover-based rent on 402 more.
The BPF said retailers should employ CVAs to provide temporary relief and not as a mechanism to permanently "rip up" leases.
A number of retailers have employed CVAs to help reduce their store estates and cut rent bills during the crisis including Hotter Shoes and AllSaints, while others, such as Monsoon Accessorize and TM Lewin, have employed pre-pack adminstrations to buy back businesses minus certain liabilities.