Monsoon Accessorize to close 10 stores
Retail chain’s UK parent to provide financial support
Models wearing Monsoon Accessorize clothing: the examiner says that 10 Monsoon stores must close. Photograph: Eric Luke
The women’s clothing and accessories chain, Monsoon Accessorize, needs to close at least 10 of its 18 stores if it is to have a reasonable prospect of survival , the High Court has been told. The company has 269 employees, of whom 60 are full time.
Mr Justice Brian McGovern yesterday appointed Declan McDonald of PricewaterhouseCoopers as examiner to Monsoon Accessorize Ireland Ltd to enable implementation of a restructuring plan aimed at securing its future.
The court was told all vouchers and store credits would be honoured during examinership and its UK parent company, Monsoon Accessorize Ltd, would provide funds to ensure the Irish company could continue to trade until August 2014, when it was expected to return to profit if certain conditions were met.
Among those conditions are the closure of a minimum of 10 stores and the securing of rent reductions in the remaining outlets, an independent accountant has said in a report.
The accountant has also recommended a corresponding reduction in employment, a renegotiation of royalties payable to the parent company, the writing down of liabilities of certain creditors and the redirecting of sales generated online in Ireland back to the Irish business.
Company director and examinership petitioner Brian Walsh said in an affidavit that the company believed each of these conditions and assumptions were capable of being satisfied. Commitments in relation to online sales and the renegotiation of the royalty payments had already been obtained, he added.
Bernard Dunleavy, for the company, said while there would have to be a writedown of liabilities, the biggest creditor was the UK parent, which had undertaken to continue funding the Irish company until August 2014 when it was expected to return to profitability.
Mr Dunleavy said the company would seek a repudiation of leases from certain stores but it would be more sophisticated than the usual repudiation sought in examinership matters It also had the resources to meet any claim for damages arising out of such repudiations.
The Monsoon Accessorize business in Ireland was set up with seven stores 18 years ago, eventually rising to 21 outlets but its fortunes changed in 2009 due to a collapse in consumer spending.