// Monsoon Accessorize tells suppliers it may need to cancel or reduce autumn 2020 orders
// It said order not received into its UK distribution centre by March 19 will be cancelled
// It would seek a discount on all other orders in transit
Monsoon Accessorize has reportedly told suppliers it may need to cancel or reduce its autumn 2020 orders in order to mitigate the financial impact of the coronavirus pandemic.
According to Drapers, the retailer’s founder Peter Simon wrote to suppliers in which he issued the warning while providing an update on Monsoon Accessorize’s position.
”We are reviewing our autumn/winter position on both existing and future orders and will be in touch regarding what we will be able to accept based on the new level of the business post Covid-19,” Simon wrote.
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While the high street chain said it has taken receipt of 90 per cent of its spring 2020 orders at full price, it told suppliers it would cancel the remaining 10 per cent not received into its UK distribution centre by March 19.
Orders currently in transit will be handled on a case-by-case basis, although Monsoon Accessorize said it could potentially accept them on a 30 per cent discount.
The retailer already extended its payment terms from 90 days to 120 days.
The news comes after the retailer last month drafted in restructuring experts from FRP Advisory to carry out a strategic review, with a possible sale of the business as one option.
Monsoon Accessorize said it had been ahead of the financial plan set out at the time of its CVA in 2019 and was trading well until March, but like many other retailers it was impacted by Covid-19 when it was forced to close stores due to the lockdown.
”It has become clear from our business review that we cannot emerge from the Covid-19 outbreak without making a range of difficult decisions, including in relation to stock orders,” Simon said in his letter, seen by Drapers.
“I can assure you that these decisions have not been made lightly and I am intensively aware of the potential implications these may have, for our suppliers who face similar cash-flow challenges from Covid-19 which are currently impacting your own businesses and employees.
”We are committed to working to stabilise our businesses position to ensure that we emerge from the Covid-19 outbreak a strong, resilient business for the future.
“As part of this strategy we have already explored and used UK government support schemes in certain areas.
“We have also undertaken a rigorous review of our business, our cashflow and our stock positions and have subsequently implemented a number of cost-control processes to improve our cash position including deferred tax payments and sought rent holidays from our landlords.”