Creditors prepare to vote on Monsoon Accessorize rescue plan
Creditors will decide the fate of Monsoon Accessorize this week as they vote on the company’s rescue plan, which includes proposals to slash rents at more than half of its leased stores.
Last month the retailer launched a company voluntary arrangement (CVA), which outlined plans to cut rent at 135 of Monsoon and Accessorize’s 258 leased stores.
Read more: Monsoon asks landlords to back rent cuts as part of rescue plan
Peter Simon, who owns the fashion chain, will inject an additional £18m into the business if creditors approve the plans on Wednesday. Simon has already provided an emergency £12m loan.
Under the proposals landlords have been offered up to £10m if the business makes a profit and beats its forecasts after the plans have been given the green light.
Monsoon ruled out any current store closures as part of the rescue deal.
The move follows a string of CVAs by prominent high street retailers. Last month Sir Philip Green’s retail empire Arcadia, which owns Topshop and Dorothy Perkins, received backing to close 23 stores and allow rent cuts of up to 70 per cent at nearly 200 branches.
High street stores are facing a number of challenges as increasing costs, the rise of online shopping and subdued spending take their toll on the industry.
Over the weekend it was reported that Jack Wills is facing a cash crunch as it burns through a £28m cash injection arranged by its private equity owner Bluegem following a drop in sales.
“In early 2016, we implemented a plan which initially delivered positive like-for-like store sales,” chief executive Paul Allen said as he revealed the CVA proposals last month.
“However, in the two years that followed, overall like-for-like sales have decreased as market conditions declined.
Read more: Monsoon Accessorize landlords ‘call for stake’ as CVA approaches
“As a result, we are now taking further action to reshape the businesses for the future.
“Although the Group has no external debt, the current rate of sales decline and recent working capital pressures have had a material impact on the Group liquidity position, particularly at the low point in the working capital cycle during the financial year.”