Monsoon CVA approved by "significant majority"
today Jul 3, 2019
Monsoon Accessorize won enough support for its company voluntary arrangement (CVA) plan on Wednesday with the company now able to seek lower rents for around two-thirds of its UK stores. The company doesn’t plan to close any stores at present, which means its 258 shops are safe for now.
While there had been talk of landlord dissatisfaction at the CVA proposals, the company appears to have convinced these key creditors and its plan to offer them up to £10 million if it moves forward and gets back to a certain level of profitable trading would have helped its case.
Founder Peter Simon’s promise to inject £18 million of funding into the company, in addition to providing a £12 million loan are further evidence of the company’s top management’s determination to make it work.
Monsoon didn’t say exactly what percentage of creditors voted in favour of the CVA but did say that it achieved a “majority significantly above the required threshold”.
CEO Paul Allen added: “We are pleased with today’s result and would like to thank our suppliers and landlords for their continued support. This action will help us to reshape our businesses for the future, and we will now turn our attention to the wider turnaround plan and delivering a sustainable and profitable business moving forward.”
The company has reportedly been mulling a CVA since April as it became clear that summer season trading would be tough and it was unlikely to see any easing of the difficult conditions that have hammered the business in recent years.
Although the CVA won’t include store closures, the company has already closed around 40 locations in the last two years and downsized some others.
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