Monsoon Accessorize creditors have approved the retailer’s company voluntary arrangement, which asks for rent reductions of up to 65% across more than half of its stores.
The retailer said it had a majority vote “significantly” above the required threshold.
The CVA proposals, as announced on 20 June, outline rent reductions of between 25% and 65% across 135 out of a total 258 Monsoon and Accessorize stores. No store closures have been proposed, but the retailer is seeking to exit at least seven Monsoon stores.
The CVA proposal, seen by Drapers, outlines an expected EBITDA loss of £3m across the businesses for the 2018/19 financial year, and a fall in revenue of 3.2% to £358m.
Paul Allen, CEO of Monsoon Accessorize, said: “We would like to thank our suppliers and landlords for their continued support. This action will help us to reshape our businesses for the future. We will now turn our attention to the wider turnaround plan, and delivering a sustainable and profitable business moving forward.”
The CVA approval comes after retail property organisation Revo urged the government to review the use of CVAs by some retailers.
Matthew Ogg, Revo policy advisor, said: “Monsoon Accessorize becomes the latest business to use CVA legislation to restructure its business, with property owners yet again the primary creditor group compromised. The frequency of retailer CVAs and the growing number of stores and jobs affected risks further damage to our high streets and town centres, local authorities and pension fund investors, as well as other retailers left at a competitive disadvantage.
“We continue to work with our retailer and property owner members to establish clear and consistent rules of engagement – including how and when the legislation should be invoked – to establish a more equitable process for creditors and understand how we can work together on early interventions to prevent a business reaching crisis point. We continue to call on the government to intervene and scrutinise how CVAs are being used by some retailers and ensure the legislation is fit for purpose in this new trading environment.”