Moss Bros, a leading retailer specializing in men’s formalwear, is reportedly considering a Company Voluntary Arrangement (CVA) as a strategy to overcome the challenges posed by the COVID-19 pandemic. The company has been significantly impacted by the lockdown, which has had a detrimental effect on the retail industry, and the widespread cancellation of events, which form a crucial part of its business. Moss Bros’ main customer base consists of individuals purchasing or renting suits for office wear, formal occasions, weddings, and more. However, with remote working becoming the norm and numerous events being delayed or canceled, the company has experienced a substantial decline in sales compared to other fashion retailers.

A recent report from The Times suggests that KPMG has been appointed to handle the potential CVA. This arrangement may involve negotiating rent reductions and implementing store closures. Moss Bros has been engaged in discussions with landlords to establish turnover-linked rent agreements, but so far, these negotiations have not been successful.

Although the company has not made any official statements regarding these reports, a potential CVA would mark another significant event in what has already been a challenging year for Moss Bros. Earlier in the year, the company agreed to be acquired by the owner of Crew Clothing for £22 million. However, due to the subsequent lockdown measures, the buyer attempted to cancel the deal. The attempt was thwarted by the City regulator, leaving Moss Bros with an uncertain future but still in control of 125 stores and around 1,000 employees.

Even as life slowly returns to a state of normalcy, industry analysts predict that retailers specializing in formal clothing will continue to face substantial hurdles. Moss Bros is not the only formalwear specialist grappling with store closures. Shirtmaker TM Lewin recently underwent a takeover that led to the closure of all 66 of its UK stores and significant job losses.

Given the current circumstances and the evolving dynamics of the fashion industry, companies like Moss Bros must display adaptability and make strategic decisions to survive. If a CVA is implemented, it would allow Moss Bros to restructure its operations, negotiate more favorable rental agreements, and responsibly manage its store network. As the company explores these options, its ability to navigate the challenges ahead and ensure long-term viability in an ever-changing retail landscape remains to be seen.

Useful links:
Moss Bros official website
KPMG official website