According to Sky News, the company has appointed Deloitte to draw up a CVA to be launched within the next few weeks. The agreement will allow the company to close loss-making stores and reduce its rents, preventing it from going into insolvency.
Sources reportedly said the retailer’s largest Monsoon and Accessorize stores were at risk but the final number of closures had not yet been agreed upon. Monsoon Accessorize currently has 270 outlets within its portfolio.
The retailer’s most recent financial results to be publicly published was for the year ending 26 August 2017, which reported an operating loss of just over £10m.
A spokesman for Monsoon Accessorize told Sky News: “The UK retail trading environment is tough and we are continuing to look at options to reduce our overall costs as we restructure the business in the UK and internationally.
“We have made no secret of the fact that we have steadily reduced our store portfolio in recent years and shall continue to do so as leases expire. We are looking at options to accelerate these store closures.”
If agreed, Monsoon Accessorize will follow in the footsteps of a number of struggling retailers including New Look, Mothercare and Paperchase, which have entered CVAs in a bid to cut costs through the reduction of rents and portfolios.