Monsoon latest retailer to seek rent cuts from landlords
Monsoon Accessorize is calling on landlords to approve rent reductions on some of its 258 leased stores as part of a restructuring of the troubled High Street chain.
The two chains operate under separate names and are asking for rent cuts on 135 stores after a period of ‘difficult’ trading.
To win support from landlords, the company is offering them up to £10m if it trades profitably in the future. No stores are to be closed.
Jobs are not expected to be lost from the 4,440-strong workforce either under the restructuring of the company, which is owned by entrepreneur Peter Simon.
The restructuring is taking place under a Company Voluntary Arrangement (CVA), which allows companies to continue trading while reaching agreement with creditors.
Mr Simon has given the company an emergency £12m loan and offered another £18m at 0% interest if the CVA is approved.
Peter Allen, chief executive of Monsoon Accessorize, said sales had been falling over the last two years.
“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,” he said.
“Trading for the group has been difficult for some time, as it has been for much of the retail industry. This is due to a combination of factors, including rising costs, increased competition and subdued consumer spending,” Mr Allen said.
The board of the company had concluded that its rent and occupancy costs were unaffordable. Mr Simon has agreed to cut the rent at the head office by 50%, the company said, to help reduce overheads.
Restructuring experts at Deloitte are handling the CVA, which is the latest to be used by troubled retailers.