Moss Bros has launched a CVA proposal
(Picture: Moss Bros press image)Moss Bros has launched a Company Voluntary Arrangement proposal after lockdowns and restrictions on large gatherings had a “savage” impact on the menswear retailer.
The chain, which was founded in 1851 and is known for its suits, is pursuing the CVA to restructure its fixed cost base. The model is a way of seeking rent cuts, changes to leases, or closures.
Moss Bross is looking at potentially exiting up to 24 sites and moving a number of branches to a turnover-based rent model.
Moss Bros, which is led by Brian Bick and has 128 stores, had to close shops for Covid-19 lockdowns this year.
The company, which employs around 800 people, said it is in a “particularly challenged sub-sector” of the retail market. Demand for formalwear has been hurt as a result of the cancellation of events such as weddings and school proms.
Bick said prior to the coronavirus outbreak the group was trading robustly versus last year.
He said: “With the introduction of further lockdown measures, and with the outlook for trading remaining depressed, the group now faces no alternative but to try and limit our fixed costs and we have therefore made the tough but essential decision to undertake a CVA in order to protect the future of our business and people.”
Will Wright, partner at KPMG and joint nominee of the CVA, said: “Restrictions on large gatherings have had a savage impact on Moss Bros, and without taking further action, the situation facing the company is perilous. The CVA proposals put forward today seeks to strike a fair compromise for creditors, while providing the business with the lifeline it needs to be able to emerge from the crisis.”
The principle objectives of the CVA are as follows for 142 leases across various properties, of which most are shops:
-To retain the majority of sites on current terms with the vast majority having a turnover based element (81 leases)
-To move a number of sites to a turnover-based rent (35 leases)
-To exit a small number of sites which could be up to 24 leases, but depends on landlord negotiations.
Creditors, including landlords, are expected to vote on the proposals next month.
