June 10, 2020 / 9:45 AM / a month ago

UPDATE 1-UK's Monsoon and Accessorize shut 35 stores in bid to survive

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LONDON, June 10 (Reuters) - British fashion retailers Monsoon and Accessorize will close 35 stores, make 545 staff redundant and seek rent cuts for remaining shops as part of a restructuring led by its founder to survive the COVID-19 crisis.

Administrators from business advisory firm FRP were appointed late on Tuesday and immediately sold the companies’ business and assets to Adena Brands, a company ultimately controlled by Peter Simon, who owned and founded Monsoon in 1973.

The coronavirus pandemic and the subsequent national lockdown had made the business unviable.

Under a so-called pre-pack administration, a company goes into a formal insolvency process but immediately emerges under a new ownership structure in a pre-arranged deal.

Adena acquired the Monsoon and Accessorize brands, their digital business, along with the intellectual property, the head office and design teams, and the group’s distribution centre in Wellingborough, central England.

As part of the deal Simon will inject up to 15 million pounds ($19.1 million) into the business.

Adena will now enter talks with the landlords of Monsoon and Accessorize’s 162 remaining stores to see if they can reach terms to reopen them when the current lockdown ends. Adena said it hopes to save up to 100 stores and 2,300 jobs.

“We will now try to save as many of our stores as possible, depending on the outcome of various discussions with landlords,” said Simon.

The UK government is allowing non-essential stores to reopen from June 15.

Britain’s store-based retail sector, outside of food, has been severely hit by the lockdown to counter the pandemic, with already weak players such as Laura Ashley, Debenhams, Oasis Warehouse and Cath Kidston all falling into administration with the loss of thousands of jobs.

$1 = 0.7839 pounds Reporting by James Davey; editing by Sarah Young and Kate Holton

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