Monsoon Accessorize has rejected landlords’ demands for an equity stake in favour of a share of future profits, ahead of its mooted CVA proposal.
The embattled fashion retailer is expected to publish the proposal for its CVA later today. Founder Peter Simon will offer store owners up to £10m a year if Monsoon’s profits can recover, Sky News reported.
The proposal has been devised by Simon as the carrot to offer disgruntled landlords, having rejected initial requests from store owners for a £30m equity package to turnaround the business.
A group of as many as six landlords – including heavyweights such as British Land and Hammerson – are being advised by PJT Partners, which also worked with them on the recent Arcadia CVA.
The long-awaited proposal is expected to be put forward to creditors at some point today. However, Retail Week understands some large landlords are already planning to fight Monsoon as it seeks to slash rents and shrink store sizes across its 270-strong estate.
One landlord criticised the retailer for its “disappointing” lack of engagement, while another landlord questioned whether Monsoon’s financial situation was bad enough for it to need to resort to a CVA in the first place.
Monsoon has maintained throughout the process, which started as early as February this year, that it is not looking to close stores as part of any CVA.
The retailer refused to comment.