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You can find the current article at its original source at https://www.theguardian.com/business/2019/jun/06/monsoon-delays-cva-procedure-after-philip-greens-for-arcadia-fails
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| Monsoon delays CVA procedure after Philip Green's for Arcadia fails | Monsoon delays CVA procedure after Philip Green's for Arcadia fails |
| (3 months later) | |
| The owner of the Monsoon and Accessorize retail chains has delayed plans for a restructuring to rescue the business after landlords failed to back similar plans by Philip Green’s retail empire. | The owner of the Monsoon and Accessorize retail chains has delayed plans for a restructuring to rescue the business after landlords failed to back similar plans by Philip Green’s retail empire. |
| Peter Simon had planned to launch an insolvency procedure known as a company voluntary arrangement (CVA) as early as Friday, which would enable him to reduce the size of his stores and pay less rent. | Peter Simon had planned to launch an insolvency procedure known as a company voluntary arrangement (CVA) as early as Friday, which would enable him to reduce the size of his stores and pay less rent. |
| The procedure, led by the advisory firm Deloitte, which is also acting for Green’s Arcadia Group, is not now expected to go ahead until next week at the earliest as Simon and his advisers continue to negotiate with landlords. | The procedure, led by the advisory firm Deloitte, which is also acting for Green’s Arcadia Group, is not now expected to go ahead until next week at the earliest as Simon and his advisers continue to negotiate with landlords. |
| Physical retailers have been hit by a combination of changing habits, unseasonably warm weather, rising costs and broader economic problems. In 2018 Toys R Us, Maplin and Poundworld disappeared as a result. | |
| In terms of habits, shoppers are switching to buying online. The likes of Amazon have an unfair advantage because they have a lower business rate bill, which holds down costs and enables online retailers to woo shoppers with low prices. Business rates are taxes, based on the value of commercial property, that are imposed on traditional retailers with physical stores. | In terms of habits, shoppers are switching to buying online. The likes of Amazon have an unfair advantage because they have a lower business rate bill, which holds down costs and enables online retailers to woo shoppers with low prices. Business rates are taxes, based on the value of commercial property, that are imposed on traditional retailers with physical stores. |
| At the same time, there is a move away from buying ‘stuff’ as more people live in smaller homes and rent rather than buy. Those pressures have come just as rising labour and product costs, partly fuelled by Brexit, have coincided with economic and political uncertainty that has dampened consumer confidence. | At the same time, there is a move away from buying ‘stuff’ as more people live in smaller homes and rent rather than buy. Those pressures have come just as rising labour and product costs, partly fuelled by Brexit, have coincided with economic and political uncertainty that has dampened consumer confidence. |
| Retailers with a high-street presence want the government to change business rates. They also want more political certainty as the potential for a no deal Brexit means some are not only incurring additional costs for stockpiling goods but are unsure about the impact of tariffs after October 2019. Retailers also want more investment in town centres to help them adapt to changing trends, as well as a cut to high parking charges which they say put off shoppers. | |
| In the October 2018 budget the government announced some relief on business rates for independent shopkeepers. It has also set up a £675m ‘future high streets’ fund under which local councils can bid for up to £25m towards regeneration projects such as refurbishing local historic buildings and improving transport links. The fund will also pay for the creation of a high street taskforce to provide expertise and hands-on support to local areas. | |
| Some retailers could go under. Weakened by a difficult Christmas – which accounts for the entire annual profits of many retailers, and with further Brexit wobbles to come – retailers are facing a tough 2019. Another rise in the national minimum wage in April and the falling value of the pound against the dollar, which is used to buy goods in the far east, have also added to costs and hit profits. | |
| Simon, who founded Monsoon as a London market stall in the 1970s, is thought to have offered to pump £34m in new investment into the retail group, which has about 270 shops, in order to keep it afloat. Landlords have also asked for an equity stake in the business. | Simon, who founded Monsoon as a London market stall in the 1970s, is thought to have offered to pump £34m in new investment into the retail group, which has about 270 shops, in order to keep it afloat. Landlords have also asked for an equity stake in the business. |
| More than one source said Monsoon had been waiting to see how landlords responded to Arcadia’s CVA before moving ahead and was taking extra precautions before launching its plan. | More than one source said Monsoon had been waiting to see how landlords responded to Arcadia’s CVA before moving ahead and was taking extra precautions before launching its plan. |
| Monsoon’s business structure means it is less reliant on the backing of landlords, with other creditors including clothing suppliers having a bigger share of the vote, but in other ways its story is seen as similar to that of Green’s empire. | Monsoon’s business structure means it is less reliant on the backing of landlords, with other creditors including clothing suppliers having a bigger share of the vote, but in other ways its story is seen as similar to that of Green’s empire. |
| Like the Green family, Simon has taken big dividend payouts from Monsoon over the years. The firm paid £5m to Adena Property, an offshore company he owned, in the year to August 2017. Its holding company also paid his family £116m in dividends between 2008 and 2013. | Like the Green family, Simon has taken big dividend payouts from Monsoon over the years. The firm paid £5m to Adena Property, an offshore company he owned, in the year to August 2017. Its holding company also paid his family £116m in dividends between 2008 and 2013. |
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