The owner of Monsoon Accessorize is facing demands from landlords to alter the terms of a multimillion pound support package to be unveiled by the fashion retailer next week.
Sky News has learnt that Peter Simon has been told by the owners of dozens of the company’s stores that they want him to provide more than £30m of rescue funding in the form of equity, rather than secured loans.
A group of six landlords – which has grown in the last fortnight from an original quartet including British Land and Hammerson – have told Mr Simon that they are less likely to back his proposals for a Company Voluntary Arrangement (CVA) unless he agrees to the change.
Sources said on Friday that Monsoon Accessorize had pencilled in next Wednesday to launch its CVA, with a creditor vote expected in July.
Sky News revealed last month that the group of landlords, which have hired PJT Partners to advise them, are asking Mr Simon to hand them an equity stake in his company in return for their support.
One insider said on Friday that the terms of the CVA were still under discussion but that the granting of a direct stake in the business to property-owners was “less, rather than more, likely”.
M&G Investments and Roubaix Group are also working together with the other landlords to seek better terms from Mr Simon.
Any equity stake in the company would be distributed among all landlords, not only the six which are negotiating collectively.
The CVA will be launched a week after Sir Philip Green secured the approval of creditors to Arcadia Group for a restructuring that will see rents slashed across much of his Burton-to-Top Shop empire.
Landlords eventually secured a better deal from Sir Philip than the original proposal, underlining the influence they have as retailers become increasingly desperate to reduce their cost-bases.
Privately held, Monsoon Accessorize trades from about 270 stores across the country, with rent cuts being sought at approximately two-thirds of them.
Its largest shops, which comprise both the Monsoon and Accessorize fascias, are understood to be faring particularly poorly in a brutal environment for retailers.
Monsoon Accessorize’s CVA will be the latest blow to a high street reeling from the accelerating shift to online shopping and pressures on business costs and consumer spending.
Under chief executive Paul Allen, Monsoon Accessorize’s holding company, Drillgreat, has been closing stores when leases expired in recent years.
However, the intensification of the retail sector’s problems has now led it to the brink of a CVA, which is typically only viable when the alternative for a company is bankruptcy.
Drillgreat’s most recent publicly disclosed results cover the year to August 26, 2017, which showed an operating loss of just over £10m.
A Monsoon Accessorize spokesman declined to comment beyond a recent statement confirming that “the UK retail trading environment is tough and we are continuing to look at options to reduce our overall costs as we restructure the business in the UK and internationally”.
None of the landlords involved in the talks would comment.