Monsoon Accessorize 'on brink of administration' - report
May 28, 2020
Fashion retailer Monsoon Accessorize is reportedly close to an administration filing due to the UK retail lockdown. As many as 3,500 jobs could be at risk if it goes under, but it's likely to survive in some form.
The company, which is controlled by entrepreneur Peter Simon, is expected to file a notice of intention to appoint administrators within a few days. This could possibly happen on Friday, a report said on Thursday afternoon. The company hasn't commented so far, however.
Monsoon was once a poster child for success in UK fashion retail, making its founder hugely wealthy. But the latest Sunday Times Rich List showed Peter Simon’s fortune is now £250 million, after a drop of £137 million. That fall happened as his company struggled in recent years and closed some stores, as well as entering a company voluntary arrangement as part of its bid for survival.
An insider told Sky News that administration was a "logical next step" as the firm continued to work towards securing a viable future.
In March, the retailer was reported to be mulling its options with FRP Advisory having been called in to work on the possible scenarios.
One of those scenarios was a sale of the company and Sky said that the company remains in talks with a small number of prospective buyers. That said, it's expected that Peter Simon would table a bid to buy back the company after an administration filing. The company has been his focus for close to 50 years since he founded it in the early 1970s.
A slimmed-down version of the business would be much more capable of working through a successful turnaround and the report also said the retail tycoon is likely to contact landlords on Friday to try to get rent-free deals for the next few months to help some of its stores through what’s expected to be a very difficult period for fashion retail.
Stores where such deals aren't available are likely to close and it’s unclear how willing landlords will be to play ball. Many backed the firm’s CVA that included rent cuts. But previously, landlord British Land had been part of a group that last year tried to mount a legal challenge to those rent cuts. This challenge was later abandoned.
The 2019 CVA saw rent cuts pushed through for 135 of the company’s shops. At the time, Monsoon Accessorize had 258 stores, but it has closed around 40 of them since then.
The company would be the latest in a string of retailers to have filed for administration due to the lockdown. Others include Laura Ashley, Oasis/Warehouse and Cath Kidston.. Sadly, they had all reported progress with their turnaround plans before they went under and the same can be said for Monsoon.
Earlier this year, the company told Fashionnetwork.com that both Monsoon and Accessorize “were trading well until the start of March, ahead of last year and ahead of the financial plan set out at the time of [the] CVA”.
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