Monsoon Accessorize has become the latest high street chain to launch a major restructuring and has asked landlords for a cut in rents on more than half its stores.<\/p>\n
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The company confirmed that accountancy giant Deloitte has been appointed to run a Company Voluntary Arrangement (CVA)<\/strong> \u2013\u00a0an increasingly popular form of restructuring that companies use to avoid collapse.<\/p>\n However they are not without controversy, with landlords claiming retailers are misusing them to cut their costs.<\/strong> A string of retailers have entered into CVAs in recent months as a way to close stores and\/or cut rent bills, including Arcadia, Debenhams, New Look, Mothercare and Select.<\/p>\n Monsoon is using its CVA to call for rent reductions on 135 sites out of 258<\/strong> across the country.<\/p>\n In a statement the company said: \u201cThe current rent and occupancy costs facing the group are now unaffordable <\/strong>given the fundamental changes that have taken place in the retail sector, and a significant number of stores are delivering a negative contribution as a result.<\/p>\n \u201cThe companies therefore need to reduce the costs of their store portfolios to ensure their ongoing viability.<\/strong> No store closures are currently planned within these proposals.\u201d<\/p>\n The company also revealed that credit insurance has been removed \u2013 meaning Monsoon must pay suppliers upfront, with insurers unwilling to cover the costs of any non-payments.<\/p>\n As part of the CVA proposals, Monsoon and Accessorize\u2019s owner,\u00a0Peter Simon, has already provided an emergency \u00a312m loan<\/strong> \u2013 which will be repaid first if the company goes bust \u2013 and a further unsecured credit facility of \u00a318m at 0% interest,<\/strong> to enable the turnaround plan to be implemented.\u00a0The \u00a318m will only be available if the CVA passes.<\/p>\n Simon has also said he would reduce rent on the company\u2019s head office,<\/strong> which he owns, by 50%.<\/p>\n To encourage landlords to sign up to the deal, company bosses have proposed a profit share scheme,<\/strong> where they could received up to \u00a310m if the stores are profitable and beat sales targets in future years.<\/p>\n A meeting will take place on 3 July where landlords will vote on the proposals.<\/p>\n Paul Allen, chief executive of Monsoon Accessorize, said:\u00a0\u201cTrading for the group has been difficult for some time, as it has been for much of the retail industry.<\/p>\n \u201cIn early 2016, we implemented a plan which initially delivered positive like-for-like store sales. However, in the two years that followed, overall like-for-like sales have decreased as market conditions declined.<\/strong><\/p>\n \u201cThe proposed CVA is designed to reduce store operating costs and to bring the costs more in line with market rents.<\/p>\n \u201cThrough implementing the CVA and the shareholder credit facility, the group will be able to invest in the business, the brands, and in growing profitable sales<\/strong> channels \u2013 both in-stores and online.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" […]<\/p>\n","protected":false},"author":11,"featured_media":129029,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[10585,6,10494],"tags":[13990,9954,10790,10782,10785,10784],"acf":[],"yoast_head":"\n