Monsoon Accessorize is asking landlords to reduce rent for more than half its 258 leased stores in return for an £18m interest-free loan and a £10m share of future profits.
The owner Peter Simon has also promised to halve the rent on the fashion business’s London head office, which he owns, to help reduce costs. He had already loaned the business £12m and would hand over an additional interest-free loan if the rescue plan was approved.
Monsoon said it was asking for rent cuts at 135 stores because current costs were “unaffordable, given the fundamental changes that have taken place in the retail sector”. It said a significant number of stores were unprofitable as a result and it needed to reduce costs in order to ensure their “ongoing viability”.
The plan involves two insolvency procedures known as company voluntary arrangements, which must win the backing of at least half of the retailer’s independent creditors.
Paul Allen, the chief executive of Monsoon Accessorize, 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.
“In early 2016 we implemented a plan which initially delivered positive like-for-like store sales. However, in the two years that followed, overall like-for-like sales have decreased as market conditions declined.”
No store closures are planned under the proposals.