Monsoon Accessorize is preparing to launch a company voluntary arrangement (CVA) within the next month to “accelerate” up to 50 store closures, after calling in advisers to consider restructuring options for the business.
The retailer has appointed consultancy firm Deloitte to look at options to reduce overall costs as it restructures the business in the UK and internationally.
A CVA has not yet been launched, but a source close to the situation told Drapers that it is “heading that way” and one could be finalised within the next month.
Stores are expected to close up and down the UK. A list of target stores has not yet been decided, however, it is understood that no more than 50 will close.
The company currently has 268 stores in the UK and around 4,000 employees across its head office and UK stores.
Monsoon Accessorize has closed 40 stores in the past two years, and the German arm of the business filed for insolvency in January.
Last June, Drapers reported that Monsoon Accessorize was making up to 14 staff redundant as part of a restructure. It blamed the difficult trading environment.
The source said: “Monsoon Accessorize has been closing stores over the last few years, as and when leases have come up. It has been closing between 15 and 20 stores each year and exiting them in a more gradual way. The way it has been performing, it sees a future with a smaller store-base.
“Quite a few stores are larger than all of the others, which are just not fit for the type of company it is any more. The boutique-size stores now tend to work better for the retailer.”
A spokesman for Monsoon Accessorize said: “The UK retail trading environment is tough and we are continuing to look at options to reduce our overall costs as we restructure the business in the UK and internationally. We have made no secret of the fact that we have steadily reduced our store portfolio in recent years and shall continue to do so as leases expire. We are looking at options to accelerate these store closures.”
Group turnover at Monsoon Accessorize dipped by 9.2% to £422.2m in the year to 27 August 2016.
EBITDA declined by 16.4% to £20.3m in the same period as the retailer continued to battle a challenging retail market and a “disappointing” performance in Monsoon’s womenswear business.
Deloitte declined to comment.