UK-based fashion and accessories retailer Monsoon Accessorize is understood to be teetering on the brink of administration in a move that could potentially put some 3,500 jobs at risk.
Owner Peter Simon is reportedly planning to file a notice of intention to appoint administrators “in the next few days,” according to a report published by Sky News yesterday (28 May).
The company, which operates the Monsoon and Accessorize chains, is said to have lined up FRP Advisory as administrators, the report claims.
Sky News added Simon is expected to request a rent-free deal from landlords for several months to “enable some of its stores to survive a period of deep uncertainty, and emerge from administration,” and that stores where landlords refuse the deal are likely to close.
The news comes after Monsoon Accessorize confirmed to just-style last month it was weighing up options to secure the business’s long term future, which could include a sale.
The company said its trading has been “badly affected by the outbreak of Covid-19” and has faced “significant pressure on revenues” after shutting all of its stores amid the pandemic.
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Sofie Willmott, lead retail analyst at GlobalData, notes Monsoon Accessorize was one of the many retailers looking unsteady on its feet prior to Covid-19, and that its CVA launched in July 2019 was not enough to secure the long term future of the business.
“Clothing and footwear is set to be the retail sector worst-hit by the crisis, with spend forecast to fall over 30% this year. Monsoon’s focus on occasionwear has left it particularly exposed to the slump in demand,” she says.
“A significant proportion of Monsoon’s range is designed with weddings and other special occasions in mind, and with social gatherings on hold for the time being, it is at a disadvantage and cannot leverage other categories like loungewear and activewear, as other clothing specialists have done.”
Willmott adds prior to the crisis Monsoon was gradually becoming less relevant in the UK clothing and footwear market, with the brand lacking appeal and facing increased competition from emerging players such as Sosandar, Mint Velvet and Hush – making customer acquisition and driving loyalty a challenge.
“The retailer is reportedly planning to ask landlords for rent-free deals over the next few months to increase its chance of survival but Monsoon is unlikely to be a retailer that clothing shoppers rush back to. With social distancing set to remain throughout 2020, special occasions will be pushed back and Monsoon will struggle to encourage spend.”
A number of UK clothing retailers have collapsed into administration in recent weeks including Debenhams, Oasis and Warehouse and Laura Ashley, with financial situations worsening due to the coronavirus pandemic forcing store closures. In addition, French Connection warned earlier this month it is likely to run out of cash if it fails to secure funding to support the business.
Monsoon Accessorize declined to comment on the reports.