Formal menswear retailer Moss Bros has launched a Company Voluntary Arrangement (CVA) restructuring deal after trading was “severely impacted” by Covid-19.
The retailer, which was impacted by closures, wedding cancellations and decreased demand for office clothing, operates 128 retail stores and employs about 800 staff.
The CVA, which is being run by KPMG, is intended to reduce its rents in a bid to protect the long-term future of the business.
Brian Brick, chief executive officer of the retailer, said the group traded “robustly versus last year” prior to the pandemic, despite a challenging retail environment.
He said the group reduced costs and furloughed staff “in order to survive the first lockdown”.
Moss Bros was acquired by Crew Clothing owner Brigadier, for £22.6 million in June, after the Takeover Panel stopped the buyer from pulling out of an agreement as the coronavirus pandemic worsened.
Mr Brick said the company had seen a “glimmer of hope” as it began to re-open stores over the summer but still suffered as “trading was severely impacted, footfall was extremely low and sales were substantially down on the previous year”.
He added: “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.
“I am extremely grateful for the support and understanding of our staff in the stores, distribution centre and head office, as well as our shareholders, landlords, suppliers and customers as we proceed with the restructuring process to safeguard our business and protect jobs.
“This, as always, remains our primary focus.”
Will Wright, partner at KPMG and joint nominee of the CVA, said: “Restrictions on large gatherings have had a savage impact on Moss Bros and without taking further action the situation facing the company is perilous.
“The CVA proposals put forward today seeks to strike a fair compromise for creditors, while providing the business with the lifeline it needs to be able to emerge from the crisis.”