The FTSE 100 property company British Land is pursuing a legal challenge against a rescue restructuring of Monsoon Accessorize, the latest in a series of battles between high street landlords and struggling retailers.
Sky News has learnt that British Land, which owns the Meadowhall shopping centre in Sheffield, filed a bid to block Monsoon’s company voluntary arrangement (CVA) following its approval by creditors in July.
Under the retailer’s plans, rents would be cut by between 25% and 65% across just over half of its 258 stores across the UK.
British Land owns only five of Monsoon Accessorize’s shops, but has been angered by various elements of the CVA proposals, including the structure of new funding provided by the retailer’s owner, Peter Simon.
The property giant voted against the CVA, which was backed by over 90% of creditors, and is understood to have felt it had little choice but to launch a legal challenge.
It is said to have felt that Mr Simon had failed to listen to concerns expressed by landlords about the terms of other CVAs, which have been deployed during the last two years for companies including Carpetright, Mothercare, New Look and Toys R Us UK.
A separate dispute between British Land and Mr Simon’s private property company Adena relating to Monsoon’s former head office is said to be unrelated to the CVA challenge.
City sources said on Thursday that there remained a realistic chance of the CVA challenge being resolved before it reached court, and that hopes of such an outcome had risen in recent days.
Talks are ongoing between the two parties, they added.
The dispute makes Monsoon Accessorize the latest in a string of prominent high street names to face opposition to a rescue plan.
Debenhams is in court this week to contest a CVA challenge funded by Mike Ashley’s Sports Direct International.
If the challenge is successful, Debenhams is likely to call in administrators for the second time this year, since it would be unable to afford the backdated rents that would be due at the pre-CVA rates.
Sir Philip Green, the Topshop tycoon, agreed to pay millions of pounds last month to settle a complaint made by two US funds about the terms of a restructuring of his Arcadia empire.
The businessman only secured approval for the Arcadia CVA after sweetening the terms in favour of landlords such as Intu Properties, which owns the Lakeside shopping centre in Essex.
A spate of high street insolvencies has underlined tensions between landlords and retailers, as changing consumer habits intensify the pressure on property-owners and their tenants.
The Monsoon restructuring does not include any plans for immediate store closures, while other retailers, including the footwear chain Office, have decided against using CVAs in an effort to strike a consensual deal with creditors.
Last month, Paul Allen, Monsoon Accessorize’s chief executive, said he would step down after six years.
British Land and Monsoon both declined to comment.