New Look to close 60 stores as part of rescue plan
New Look has announced plans to close 60 of its 593 UK stores as part of a rescue deal for the struggling fashion retailer.
The company is instigating a Company Voluntary Arrangement and seeking approval from creditors on a plan to improve the operational performance of the company.
Alistair McGeorge, executive chairman of New Look, said: “Given our challenged trading performance and over-rented UK store estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.
“We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal. A priority for us is to keep all potentially affected colleagues informed during this difficult time.”
Under the proposals, New Look has identified 60 shops for potential closure, alongside a further six sites which are sub-let to third parties. In addition, the plans include a reduction in rental costs and revised lease terms across 393 stores.
The proposals also involve a requirement to make redundancies from the stores identified for closure. This is expected to affect a maximum of 980 staff members out of the company’s 15,300 UK staff base.
In statement, New Look said it would be making every effort to redeploy staff from closed stores elsewhere in the business.
New Look is seeking creditor approval on the proposals, which is due on 21 March 2018. The company said all UK stores will remain open as normal during the period of the proposal and that its online sales channel will be unaffected by the changes.
Daniel Butters and Neville Kahn of the Deloitte business advisory firm have been appointed as nominees to the CVA.
Butters added: “The retail trading environment in the UK remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels.
“New Look is an iconic brand on the high street and the CVA will provide a stable platform upon which management’s turnaround plan can be delivered. We have fully engaged with the British Property Federation and its members and their views are reflected in what we believe is a fair proposal to restructure the property obligations of the company.
“It is important to stress that no stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full.”
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