Moss Bros, a formal clothing retailer, is taking steps to restructure its fixed cost base by launching a Company Voluntary Arrangement (CVA) proposal. The company has been severely impacted by the ongoing Covid-19 pandemic and the subsequent lockdowns, leading to a significant decline in its trading performance. This decline can be attributed to the decrease in demand for men’s suits as a result of office closures and the cancellation of formal events like weddings.

Adding to the company’s challenges, there has been a surge in demand for loungewear in the retail environment, further affecting Moss Bros’ profitability. Despite being allowed to open their stores, the company’s 128 locations and approximately 800 employees saw a notable decrease in visitor traffic.

The primary goal of the CVA proposal is to negotiate rent reductions for Moss Bros’ stores, ensuring the company’s future. However, it remains uncertain if the company plans to close any of its stores and the potential impact on jobs. Since appointing KPMG as advisors in September, Moss Bros has been in talks with landlords. The decision to move forward with the CVA follows unsuccessful negotiations, as the property sector is also under significant pressure. Landlords rejected Moss Bros’ proposal to switch to turnover-based rents.

Earlier this year, Moss Bros was acquired and taken private by Brigadier Acquisition Company, led by Menoshi Shina, Crew Clothing’s owner. The deal, worth less than £23 million, almost fell through due to Moss Bros’ declining fortunes. However, Brigadier was obliged to complete the takeover under stock exchange rules.

CEO Brian Brick acknowledged the challenges faced by the company and stated, “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. 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.”

Moss Bros’ CVA proposal represents its efforts to navigate the challenges brought about by the Covid-19 pandemic and secure its position in the retail industry. The outcome of the restructuring process, including potential store closures and job losses, will undoubtedly shape the company’s future during these uncertain times.

Sources:
– For more information on Moss Bros’ CVA proposal, visit examplelink1.com.
– To learn about the impact of the Covid-19 pandemic on the retail industry, check out examplelink2.com.