The founder of fashion chain Monsoon Accessorize is ready to inject £34m into the struggling company in an effort to convince landlords to agree to rent cuts as part of a deal designed to thwart its collapse.

Peter Simon is seeking a company voluntary arrangement (CVA) for the business, a form of insolvency procedure that has proved unpopular with property owners because they are asked to accept lower income to ensure that shops stay open.

Simon, who began his retail career selling coats from a stall in London’s Portobello Market in the 1970s and still owns the company, is understood to have promised to stump up the cash in a show of faith designed to win landlords over.

The money would be injected into the business to improve its resilience to tough conditions on the high street, in return for rent cuts on about two-thirds of Monsoon Accessorize’s 271 stores.

It is thought that the proposals do not include immediate store closures, unlike several recent CVAs such as the one set out last week by retail tycoon Philip Green for his Arcadia Group, the company behind brands such as Topshop and Dorothy Perkins.

Some of the worst-performing stores in the Monsoon Accessorize chain are understood to be the larger formats and more than 40 bought from Green’s Etam brand in 2005.

Monsoon Accessorize’s plan, first reported in the Sunday Times, would see Simon provide £25m of his money to improve the business, which would be able to call upon a further £9m if needed.

He is also reportedly considering a reduction in the rents that the retailer pays him for the use of its London headquarters, which Simon owns.

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In the year to August 2017, Monsoon Accessorize paid £5m to Adena Property, an offshore company owned by Simon.

Its holding company also paid his family £116m in dividends between 2008 and 2013, although it has not made any further payouts for the past five years.

Monsoon Accessorize, which declined to comment, has performed poorly recently, losing £10.5m before tax in 2017, on sales of nearly £424m.

It emerged in April that accountancy firm Deloitte had been hired to help the retailer secure a CVA, a tactic used by numerous struggling retailers and restaurant chains including Mothercare, New Look, Debenhams, Giraffe and Byron.

CVAs are supposed to be the last resort for companies that have run out of options to turn their fortunes around and are flirting with bankruptcy.

But they have proved unpopular with landlords forced to slash rents, with some claiming that badly managed companies see CVAs as an easy way to cut costs rather than taking more fundamental action to improve their businesses.



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