Monsoon Accessorize, one of the UK’s largest privately owned fashion retailer, is considering the using a Company Voluntary Arrangement (CVA) procedure to enable it to close non-profitable stores and significantly reduce rent in an effort to battle the high street turmoil.
The business operates retail shops from almost 270 stores across the United Kingdom, many of which are expected to require landlords’ approval for rent reductions even if they remain open.
The news is the latest blow to a high street reeling from the accelerating shift to online shopping and pressures on business costs and consumer spending.
Last week, Debenhams emerged from a brief spell in administration under the control of its lenders, with a CVA anticipated in the coming weeks.
Source: Sky News
A CVA allows a company to continue to trade, whilst negotiating repayment terms with aged creditors, including landlords, and is based on affordability. A CVA seeks to save the business as a going concern, thereby preserving jobs. The continued trade usually results in a better return for creditors than would be received if the business is wound up.