More than 500 jobs are set to be lost after Monsoon Accessorize entered administration, while fashion firm Quiz is set to let 93 jobs go.
British retailer Monsoon Accessorize expects to make 545 staff redundant as it closes 35 stores, despite founder Peter Simon buying the business out of administration almost immediately.
The deal will transfer around 450 jobs to Adena Brands, owned by Mr Simon, which has promised to inject £15 million into the business to allow the remaining stores to stay open.
Mr Simon will try to renegotiate with landlords to get a better deal on the remaining 162 store leases. He will hope to save as many as 100 stores and 2,300 jobs.
And fashion chain Quiz is placing the division that runs its 82 standalone stores into administration as part of a restructure to offload loss-making outlets and slash its rent bill.
The group said 822 of the 915 staff affected by the decision will remain with the group but that 93 jobs are at risk.
Fashion chain Quiz is placing the division that runs its 82 standalone stores into administration as part of a restructure to offload loss-making outlets and slash its rent bill
Quiz will look to buy back the stock and some of the assets from the Kast division placed in administration for £1.3 million so it can try to renegotiate better rents with landlords on some of the stores with a view to keeping them open.
It did not disclose how many stores it would be looking to retain as part of the deal.
Quiz, which will appoint administrators KPMG to the division on Wednesday, said while the shop chain had been loss-making, it continues to see a future for an ‘economically viable store portfolio’ alongside its online business, concessions and international arm.
It said woes at the stores business have been compounded by the lockdown, which forced the closure of all non-essential shops in the UK since late March.
The announcement comes after a tough period for Quiz, which has suffered sliding high street sales and losses due to tough retail conditions.
Retail experts have been questioning the future of Quiz in recent months as the chain battled against sliding sales and dwindling numbers of shoppers on the high street.
Monsoon Accessorize expects to make 545 staff redundant as it closes 35 stores, despite founder Peter Simon buying the business out of administration almost immediately
A small number of job losses are expected across its head office in Glasgow and distribution centre in Bellshill near Glasgow, with others at risk depending on negotiations with landlords.
Tarak Ramzan, chief executive of Quiz, said: ‘It is with deep sadness and regret for some of our colleagues and partners that we had to take this decision to restructure the group’s operations.’
He added: ‘Whilst we have taken pro-active actions over the past 18 months to drive footfall to our stores and renegotiate leases to improve performance, the significant economic uncertainty we now face as consumers and businesses emerge from the Covid-19 pandemic has meant that, in order to ensure a sustainable future for the group, we have taken this decision to place the subsidiary which operates our stores into administration.
‘We continue to believe that stores, with appropriate property costs and flexible lease terms, can continue to be a relevant pillar in our omni-channel model and we will be seeking to re-open Quiz stores where we believe it is prudent and economic to do so.’
At Monsoon Accessorize, Mr Simon, formerly a majority owner, agreed with administrators he would buy the business almost as soon as it slid into the process on Monday.
He said: ‘Ever since I opened the first Monsoon store in Beauchamp Place in 1973, this business has been my passion and my life, and I did not want to see it fall victim to this unprecedented crisis.’
At Monsoon Accessorize, Mr Simon, formerly a majority owner, agreed with administrators he would buy the business almost as soon as it slid into the process on Monday
The firm had insisted a turnaround plan was going well after it negotiated a company voluntary arrangement with landlords.
However while the business was trying to heal, all of its stores were forced to close as Covid-19 hit the country.
‘Both Monsoon and Accessorize were trading well before the coronavirus pandemic but the business simply could not withstand the financial impact of having to close all its UK, franchise and joint venture stores for almost three months,’ Mr Simon said.
‘This deal secures the future of both Monsoon and Accessorize and means we can continue to serve our customers online without a pause. In addition, we will now try to save as many of our stores as possible, depending on the outcome of various discussions with landlords. I would like to thank landlords for the helpfulness and enormous forbearance they have shown so far, which has enabled us to get to this point.’
Tony Wright, joint administrator and partner at FRP, said: ‘We had to move quickly and decisively to secure the future of Monsoon and Accessorize, as many jobs as possible and the presence of these two iconic brands on the UK high street.
‘After assessing a range of options this deal achieves those goals with least disruption to the business in an already challenging retail environment.
‘We are now committed to working with Adena Brands as they enter talks with landlords to agree future terms across their store portfolio and look to transfer more jobs to the buyer.
‘We’ll also be working with the Redundancy Payments Service to support all affected employees through this difficult time.’