Monsoon Accessorize is planning to slash its rent bill for more than half of its stores, as it becomes the latest troubled retailer to turn to a controversial rescue plan in a bid to avoid collapse.
The high street fashion chain is hoping landlords will back its planned rent cuts on 135 stores after offering them up to £10m if the firm trades profitably in the future.
Founder Peter Simon has also offered the firm an £18m interest-free loan in a bid to win the support of landlords, who will be voting on the proposals at a crunch creditor meeting in July.
Monsoon said the “current rent and occupancy costs facing the group are now unaffordable given the fundamental changes that have taken place in the retail sector”, and ruled out any current store closures as part of the rescue deal.
The cost-cutting proposals form part of a company voluntary arrangement (CVA).
Paul Allen, chief executive of Monsoon Accessorize, said: “Trading for the group has been difficult for some time, as it has been for much of the retail industry. This is due to a combination of factors, including rising costs, increased competition and subdued consumer spending.
“In early 2016 we implemented a plan which initially delivered positive like-for-like store sales. However, in the two years that followed, overall like-for-like sales have decreased as market conditions declined.”
It is hoped that the CVA proposals will be approved and the business will be successfully restructured.