Monsoon Accessorize 'plans store closures, CVA'
The start of another week and news of another UK fashion retail chain seeking a CVA and planning to close a raft of stores. Monsoon Accessorize is reportedly the latest company to realise that its problems are too big to handle in its current form with Deloitte believed to have been appointed to oversee its CVA process.
The company is expected to accelerate a store closure programme that it had embarked upon earlier as locations came to the end of their leases. Around 40 have closed so far but it’s unclear how many more stores might close out of its total of 270 in the UK under the new plan. There have been suggestions that “dozens” could be shuttered.
News of the privately-owned company’s woes comes just a week after the demise of Debenhams and hot on the heels of a number of other administration filing and CVAs for companies both large and small.
Sky News reported that a CVA could be launched within weeks. The 46-year-old retailer is expected to close larger locations first while others will be relocated or downsized, moves that are likely to prove unpopular with landlords. The property sector has been battered by a wave of store closures in the past couple of years and that wave shows no signs of slowing down.
Almost 2,500 stores disappeared from the UK’s 500 largest high streets last year, a PricewaterhouseCoopers survey showed last week, with almost 85,0000 jobs lost.
Monsoon Accessorize hasn’t confirmed the reports but it’s widely believed that they’re accurate and analysts have already started commenting on the reasons for its weakness and its chances of success.
Chloe Collins, Senior Retail Analyst at GlobalData, said: “It is essential that Monsoon Accessorize, like many other retailers over the last few years, works to reduce its high street presence. Monsoon, which commands just a 0.5% share of the UK womenswear market, has limited brand appeal and an unclear position on the high street. Little trend influence and higher price points than many of its rivals has meant that it has struggled to drive footfall and differentiate itself. With increased competition from the likes of Sosandar, Mint Velvet and Hush, Monsoon has little opportunity to regain lost market share.”
But all is not lost for the company as a whole, she believes. “Despite its own challenges, Accessorize has more potential to regain shopper spend if ranges become more fashion forward and the brand leverages social media to increase desire among a younger demographic,” she said. “With store closures inevitable, it must protect and invest in its prime locations, namely travel retail sites, where high volume footfall, a captive audience and impulse shopper motivations suit the Accessorize proposition.”
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