Fri, 29 May 2020 | ADMINISTRATION
Fashion retailer Monsoon Accessorize is close to entering administration and plans to file a notice of intention to appoint administrators over the coming days. The company is reported to have lined up FRP Advisory to manage the process.
Monsoon Accessorize operates 220 stores across the UK, which have been closed since late March due to the ongoing coronavirus pandemic, and employs around 3,500 staff. It is owned by businessman Peter Simon, who has been seeking a buyer for the business since stores closed in March.
Simon is reportedly considering another rescue deal for the brand, having injected £12 million into it last year. This restructuring deal took the form of a Company Voluntary Arrangement (CVA), through which 135 stores had their rent bills cut and 40 were closed permanently.
Simon is said to still be in negotiations with potential buyers, but insiders have said that a notice of intention to appoint administrators represents a “logical next step” for the company. If the company does enter administration, Simon will reportedly look to buy back a slimmed-down version of the business.
The owner is also expected to write to landlords today to request a rent-free deal for several months, which could enable some stores to survive the current crisis and emerge afterwards. Stores which are refused this are said to be likely to close.
The COVID-19 pandemic appears to have exacerbated the difficulties the company was already experiencing. Analysts have suggested that the business’ focus on occasionwear has meant it is particularly susceptible to the impact of the pandemic.
As stores are closed and special occasions likely to be cancelled for as long as social distancing remains in place, the company has lost a significant chunk of its business without having other categories to fall back on, such as loungewear or sportswear.
In its most recent accounts, to the year ending August 25 2018, the company reported turnover of around £296 million, down from £310.9 million the year prior, and an underlying EBITDA loss of £1.8 million, from an EBITDA profit of £6.9 million in 2017.
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