Monsoon Accessorize has asked landlords to cut rents by up to 65% across more than half of its stores, as part of its company voluntary arrangement, which launched yesterday.
The CVA proposes rent reductions from 25% to 65% across 135 out of a total of 258 Monsoon and Accessorize stores. Those facing the highest rent cuts include Accessorize stores in Bury, Dundee, Gloucester and Reading.
Although no closures have been proposed, the company is seeking to exit at least seven Monsoon shops stores within eight months. Stores, divided into seven categories, will also face a varying levels of business rates reductions, from 40% to 20% depending on the severity of rent cuts.
Monsoon Accessorize owner Peter Simon has already provided an emergency credit facility of £12m on a secured basis, and has pledged to provide a further £18m in the form of an interest-free loan if creditors approve the CVA.
The proposal, seen by Drapers, outlines an expected EBITDA loss of £3m across the businesses for the 2018 financial year, and a revenue fall of 3.2% to £358m. Also outlined in the document is the company’s recovery plan should the CVA be approved. This includes a focus on improving the online offer, part of which will be to re-platform the website in early 2020. Increased customer loyalty programmes and further product development are also proposed to boost like-for-like sales.
The company plans to continue to drive growth in the marketplace business and in international markets, and will continue with its strategy to separate the Monsoon and Accessorize businesses.
The companies will seek creditor approval on the proposals at a meeting to be held on 3 July. If creditors do not approve the deal, the proposal document warns that “it is likely that the company will no longer be able to trade as a going concern, which could be likely to result in the appointment of administrators or liquidators to the company.” If approved, the Monsoon Accessorize expects the CVA to complete by 31 December 2022.