More Bad News for the High Street – Monsoon Accessorize Ireland Apply for Examinership

Sad news today, as another mainstay of the high street faces an uncertain future in Ireland...

Tom Lyons, of The Sunday Independent, has reported on Twitter this afternoon that Monsoon Accessorize Ireland has applied to go into examinership.

In a series of tweets the journalist told followers that the company has 21 Irish stores and 160 staff. According to Lyons, the company lost €2.38m in the year to ending August 2011, comparable to a pre-tax profit of €5.6m year before. 

Lyons added that the company says: “existing leases are hammering it”. 

Monsoon has been in Ireland 18 years, and will continue to honour existing gift cards and credit notes until future notice. 

The company came in for criticism in the past week as it emerged that the retailer charges suppliers a rebate of up to 4% on all invoices as well as a further charge of up to 10% for early payment.

The store has long been cited as one of the worst offenders for overcharging Irish customers, with Euro prices often far greater than the exchange rate would suggest for the Sterling price on the same products. 

UPDATE: 16.15: Statement 

Her.ie this afternoon received the following statement regarding Monsoon Accessorize Ireland Limited's application for examinership:

Monsoon Accessorize Ireland Limited (“MAIL”) announces that it has today submitted an application to the High Court for the appointment of Mr Declan McDonald of PriceWaterhouseCoopers Chartered Accountants as an Examiner to the Company.

This application is necessary and unavoidable to allow the company a period of protection during which the Examiner is to formulate proposals which would, if approved by the High Court, restructure the company’s finances and ensure its survival. MAIL has been loss-making for some time, as a result of the prevailing economic conditions and the high cost of its existing leases.

Earlier this month the company attempted to negotiate a reduction in the cost of its leases with its landlords to place the business on a strong financial footing but it was unable to reach an agreement that satisfied all parties.

During the Examinership, if it is approved by the Courts, it will be business as usual at MAIL, while the Examiner looks into all aspects of the business to strengthen its finances. The company will continue to honour gift cards and credit notes. Monsoon Accessorize has been in the Republic of Ireland for 18 years and remains wholly committed to operating in the country, but it cannot continue to suffer such significant losses for an indefinite period.

Whatever the outcome of the court process and the Examinership, Monsoon will do all it can to prioritise the need of its staff, who continue to serve the business loyally.

Gail Ford-Hills, retail director for Monsoon Accessorize for Britain and Ireland, said: “we very much regret having to take this course of action, but after our negotiations with landlords failed to deliver a workable proposal we realised we had no option given the on-going level of losses in the business. If the appointment is approved by the High Court we will work closely with Mr MacDonald to come up with the best possible solution to strengthen MAIL and secure its position in the Republic of Ireland for years to come.”