Monsoon Accessorize’s CVA has been passed by its creditors, paving the way for hefty rent reductions at around half of its stores.
The retailer did not disclose by what margin its CVA passed but said it was “with a majority significantly above the required threshold”.
Of the retailer’s 258 stores, 135 will now be subject to rent reductions between 25% and 65% for up to three years.
In exchange, the business has offered creditors participation in a £10m annual profit-sharing scheme, if its profits can recover. Creditors had previously called for an equity share in the business, as was awarded by Arcadia owner Sir Philip Green to get its CVA passed, but Monsoon rejected those proposals.
Monsoon Accessorize founder Peter Simon has already provided a £12m emergency credit facility on a secured basis and has agreed to provide a further £18m at 0% interest to help turn around the business, “conditional upon the CVAs passing and not being subject to a successful challenge”. He has also agreed to slash the rent on the retailer’s head office in West London, which he owns, by 50% to help reduce overheads.
Chief executive Paul Allen said: “We are pleased with today’s result and would like to thank our suppliers and landlords for their continued support. This action will help us to reshape our businesses for the future and we will now turn our attention to the wider turnaround plan and delivering a sustainable and profitable business moving forward.”
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