With no store closures planned across its 258 outlets, the company is asking for rent reductions of 25% and 65% at 135 stores as it said current costs were “unaffordable, given the fundamental changes that have taken place in the retail sector”.
Although no closures are planned Monsoon is seeking the right to exit at least seven stores within the next eight months and it won’t be seeking rent cuts on seven more as the leases can be let go at a short notice.
Monsoon founder and owner Peter Simon has also said he will halve the £5m rent at its London office. He has already injected £12m into the business and the £18m loan is dependent on the approval of the CVA which is expected to be voted on on 3 July.
Monsoon CEO Paul Allen said in a statement: “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. As a result, we are now taking further action to reshape the businesses for the future.
“Although the group has no external debt, the current rate of sales decline and recent working capital pressures have had a material impact on the group liquidity position, particularly at the low point in the working capital cycle during the financial year.”
He added: “Through implementing the CVA and the shareholder credit facility, the group will be able to invest in the business, the brands, and in growing profitable sales channels – both in-stores and online.”