By guest author Elias Jahshan from Retail Gazette
- Moss Bros launches CVA proposal in a bid to reduce rental costs
- No further details of the CVA have been provided – especially around whether it would impact its 800 staff
- The proposal comes less than 6 months after the finalisation of a deal that saw Brigadier Acquisition buy Moss Bros for GGBP 22.6 million
Moss Bros has launched a CVA proposal which aims to “restructure its fixed cost base” after trading was “severely impacted” by the Covid-19 pandemic.
The retailer – which specialises in formal menswear and suits and was impacted by store closures, wedding cancellations and decreased demand for office clothing – operates from 128 retail stores and employs about 800 staff.
The CVA proposal is intended to reduce its rents in a bid to protect the long-term future of the fashion retailer.
However, no further details of the CVA have been provided as yet – including whether it would impact jobs.
Moss Bros had hired auditing firm KPMG to advise on a possible restructure in September.
The menswear retailer had since been negotiating with landlords to switch its rental agreements to ones that are based on turnover, but these talks have reportedly failed.
The CVA proposal comes less than six months after the finalisation of a deal that saw Brigadier Acquisition Company – a group of private investors led by Crew Clothing owner Menoshi Shina – buy Moss Bros for GBP 22.6 million and take the retailer off the stock market.
The board of Moss Bros, which resigned in July after the acquisition was completed, had initially agreed to the terms of a cash offer of 22 Pence per share by Brigadier Acquisition Company back in March.
Shina had also unsuccessfully attempted to retract the deal, as it was agreed just two weeks before the UK was gripped by the Covid-19 pandemic and subsequent nationwide lockdown that lasted three months.
Moss Bros chief executive Brian Brick said: “Prior to the Covid-19 pandemic the group was trading robustly versus last year, despite operating in a challenging business environment.
“At the outset of the pandemic, we managed to reduce costs and furlough staff in order to survive the first lockdown.
“There was then a glimmer of hope as we began to reopen some stores in the summer period, but even then trading was severely impacted, footfall was extremely low and sales were substantially down on the previous year.
“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.”