Monsoon Accessorize, the UK fashion chain, is on the brink of administration putting 3,500 jobs at risk and adding to the fast growing number of empty sites springing up on high streets as a result of coronavirus.
The 50-year-old company plans to file a notice of intention to appoint administrators by the end of the week, according to two people close to the company, after struggling to find a buyer.
FRP Advisory, the restructuring specialists, are set to be appointed to run an insolvency process, one person said, adding that the retail group’s management were hopeful that if a buyer could be found “a significant proportion” of jobs could be saved.
Like other retailers deemed non-essential under the government’s coronavirus restrictions, Monsoon closed all of its shops in late March. Despite a rise in online sales since then, the company has faced a cash crunch as rent payments and other overhead costs are due.
Monsoon declined to comment.
The fashion retailer, which also includes the handbag and jewellery chain Accessorize, is the latest in a series of high street retailers to fall victim to the coronavirus lockdown. The fashion chains Cath Kidston, Laura Ashley, and Oasis have all entered administration processes since the outbreak of the pandemic.
The British Retail Consortium estimated that the closure of non-food retailers had cost that sector in the region of £1.8bn and warned that many would be “still be in a fight for survival” after reopening was allowed.
It is less than a year since Monsoon undertook a company voluntary arrangement, an administration process to allow it to close about 40 underperforming stores and cut rents at another 135.
The business, which was founded by the entrepreneur Peter Simon in the 1970s, started life as a stall on the Portobello Road selling yak wool coats. After it listed in 1998, it rose to a valuation of £800m before being taken private by Mr Simon again in 2007 in a £185m deal.
As part of last year’s agreement with creditors, Mr Simon put an additional £12m into the business.
In its latest set of available accounts, Monsoon’s auditors BDO registered “material uncertainty” over the company’s ability to continue as a going concern should it not be able to access further funding after the CVA.
According to the Sunday Times, which published its Rich List this month, Mr Simon’s personal wealth has slumped from £387m to £250m this year.
Monsoon’s plan to file a notice of intent to appoint administrators this week was first reported by Sky News.