Moss Bros launches CVA proposal

British formalwear brand Moss Bros has launched a company voluntary arrangement (CVA) proposal following a difficult year for the company battling store closures and the cancellation of large events.

The company, which operates from 128 retail stores and employs around 800 staff, is looking to use the CVA to reduce its rents, according to Retail Gazette. No further information has been provided about the CVA, including whether it will impact jobs.

“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 re-open some stores in the summer period, but even then trading was severely impacted, footfall was extremely low and sales were substantially down on the previous year,” said Moss Bros CEO Brian Brick, according to Retail Gazette.

“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.”

A difficult year for formalwear

Moss Bros called in advisory firm KPMG in August to work on a potential CVA after talks between the brand and its landlords failed to reach an agreement to turn some of its store estates over to turnaround-based rent.

In March, Crew Clothing-owner Brigadier Acquisition Company Limited agreed to acquire Moss Bros in a 22.6 million pound deal. However, just weeks after the deal was announced, Brigadier sought a ruling from the Takeover Panel to cancel its offer.

Moss Bros successfully opposed the decision, citing a rule in the Takeover Code that states an offer cannot be lapsed or withdrawn “unless circumstances which give rise to the right to invoke the condition are of material significance” in the context of the offer.

The formalwear category has been significantly impacted by Covid-19, with the cancellation of large events such as weddings and the Royal Ascot dealing significant blows to sales.

A growing number of British fashion companies have launched CVAs in recent months in an effort to mitigate the financial impact of Covid-19, including Clarks, New Look, AllSaints, Bair Group and Monsoon Accessorize.

Photo credit: Moss Bros, Facebook