UK suit retailer Moss Bros has called in auditors, and may close stores and cut staff
- UK formalwear retailer Moss Bros may close some of its 125 stores and cut some of its 1,000 staff, The Times reported. It has called in auditors KPMG.
- The menswear retailer had asked landlords to base its rent on turnover, but they refused.
- The luxury fashion market has been heavily hit by lockdown, which cancelled weddings and stopped tourists from flying abroad.
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UK formalwear retailer Moss Bros is considering closing some of its 125 stores after sales of suits plunged during lockdown, according to a report.
The menswear chain, which sells formal attire from Ted Baker and Hugo Boss alongside own-brand clothes, has recruited auditors KPMG to advise on permanently closing some of its sites, reducing rents, and removing some of its 1,000 jobs, The Times reported.
This would involve a Company Voluntary Arrangement (CVA), which allows insolvent companies to pay debts to creditors over a fixed period, improving their cash flow.
Previous negotiations for the stores' rents to be based on turnover failed, according to The Times. The retailer did not respond to the newspaper's request for comment.
Brigadier Acquisition Company, the owner of UK retailer Crew Clothing, agreed to buy Moss Bros for £22.6 million ($30.3 million) in March, two weeks before the UK went into lockdown and the suit chain shut all its stores. Brigadier attempted to abandon the deal, but later agreed to complete it.
Demand for formalwear plummeted during lockdown. The cancellation of weddings, graduation ceremonies, and popular events such as the Royal Ascot horse race have meant that fewer people need new formal attire. Travel restrictions have also affected the luxury goods market, with international visitor spending in the UK expected to fall by 78% compared to last year, according to the World Travel & Tourism Council.
Even in London's Bond Street, Oxford Street, and Regent Street, which are renowned for designer brands, visitor numbers to stores are down 73% year-on-year, according to the New West End Company, which represents retailers in the area. Consultancy firm McKinsey forecasts that global sales of luxury goods will drop by between 35% and 39% in 2020, compared to 2019.
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