Troubled Moss Bros launches CVA proposal to tackle ‘perilous’ situation
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Struggling retailer Moss Bros has launched a Company Voluntary Arrangement (CVA) proposal to give it the best chance of emerging for the challenges brought on by the coronavirus.
A CVA allows companies to settle debts by paying creditors over a fixed period, and it could see the closure of some of Moss Bros’ 125 UK stores and rent reductions on others. Big four auditor KPMG has stepped in to help with the process.
As with other high street apparel retailers, the company has been severely impacted by the ongoing lockdown measures implemented by the government in response to the Covid-19 pandemic.
The company said its niche in particular – men’s apparel and formalwear – has been one of the hardest hit areas of the retail sector, given the cancellation of events such as weddings, school proms and occasions including Royal Ascot.
Moss Bros CEO Brian Brick said before coronavirus the group was trading “mostly robustly.”
“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 re-open 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,” 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.“