Monsoon Accessorize has warned suppliers that it may have to cancel or reduce its autumn 20 orders as a result of the continued economic impact of coronavirus.
Founder Peter Simon has written to suppliers updating them on the business’s position. The letter, seen by Drapers, warned suppliers that ”some [autumn 20] orders will need to be cancelled and or quantities reduced.”
Simon said: ”We are reviewing our autumn/winter position on both existing and future orders and will be in touch regarding what we will be able to accept based on the new level of the business post Covid-19.”
The fashion retailer noted it has taken receipt of 90% of its spring 20 orders at full price. However, it has now informed suppliers that the remaining 10% not received into its UK distribution centre by 19 March will be cancelled.
Orders already on the water or received by this date will be handled on a case-by-case basis, with the potential consideration of Monsoon Accessorize accepting them with a 30% discount.
Last month, the business extended its payment terms from 90 days to 120 days. This extension will be applied to all orders going forward, with a review as soon as the business sees an improvement in its trading and cash position.
Monsoon Accessorize is currently considering a potential sale of some or all of the business, among other options to secure its long-term future post Covid-19.
In the letter sent to suppliers yesterday, Simon said: ”It has become clear from our business review that we cannot emerge from the Covid-19 outbreak without making a range of difficult decisions, including in relation to stock orders. I can assure you that these decisions have not been made lightly and I am intensively aware of the potential implications these may have, for our suppliers who face similar cash-flow challenges from Covid-19 which are currently impacting your own businesses and employees.
”We are committed to working to stabilise our businesses position to ensure that we emerge from the Covid-19 outbreak a strong, resilient business for the future. As part of this strategy we have already explored and used UK government support schemes in certain areas. We have also undertaken a rigorous review of our business, our cashflow and our stock positions and have subsequently implemented a number of cost-control processes to improve our cash position including deferred tax payments and sought rent holidays from our landlords.”
Monsoon Accessorize declined to comment.