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New Look to close 60 stores, with 980 jobs at risk

Struggling retailer New Look could close 60 stores, putting 980 jobs at risk, as it becomes the latest business to fall victim to difficult conditions on the high street.
The fashion retailer has instigated a company voluntary arrangement, a form of insolvency aimed at protecting a business from going bust entirely, and is seeking approval from its lenders for a restructuring plan.
New Look said it had identified 60 out of its 593 stores in the UK to be closed, along with a further six sites that are sub-let to third parties. The plan requires the company to make up to 980 staff redundant, out of its 15,300 UK employees, although it will attempt to redeploy people “where possible”.
The plan also includes a rent reduction and new lease terms for 393 of its stores.
New Look, which is owned by South Africa's Brait, has asked its creditors to approve the proposal by March 21 and all stores will remain open until then. Deloitte is acting as nominee to the CVA.
New Look to close 60 stores, with 980 jobs at risk

Alistair McGeorge, New Look's boss, said it had 'wrongly moved to become younger and edgier'
Alistair McGeorge, the executive chairman that New Look brought back in November to help with its turnaround effort, 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.”
He said the company had held “constructive discussions with our key landlords and strategic partners” ahead of the CVA proposal.
Daniel Butters, a partner at Deloitte, said that the CVA “will provide a stable platform upon which management’s turnaround plan can be delivered”.
New Look | 60 UK stores could close
He added that the retail trading environment in the UK “remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels”.
Speaking to The Daily Telegraph in February, Mr McGeorge said the chain had been forced to discount products heavily after becoming "completely overcommitted" on stock levels, which had taken "a dreadful toll" on the business.
"Not only had we wrongly moved to become younger and edgier in the product that we bought [but] we put up the prices on average about 13pc," Mr McGeorge said. 
As a result New Look’s total sales fell and the company made a pre-tax loss of ?123.5m in the 39 weeks to Dec 23, compared to a profit of ?29.2m in the same period the year before.
All the major high street brands that have collapsed since the recession
New Look – which had ?1.14bn of debt at the end of March 2017 – had come under pressure from its bondholders to agree to a costly financial restructuring, as lenders sought to avoid further damaging losses.
The retailer is the latest to come under pressure, after Toys R Us and Maplin collapsed into administration last week. Restaurant chains Prezzo, Cafe Rouge and Jamie's Italian have all recently employed CVAs in an attempt to rescue themselves.
Analysts have said New Look's survival depends on it cutting back its estate, starting with high-rent, city centre shops.
New Look was the third biggest Value Clothing retailer in the UK back in 2009 but has since fallen to sixth, and will fall further as closures impact. pic.twitter.com/O86mX3yEiJ— Patrick O'Brien (@pat_gdretail) March 7, 2018
Charlotte Pearce Retail Analyst at GlobalData, said: ‘‘New Look is now in danger of slipping out of the top 15 UK clothing retailers this year."
She said that the retailer’s plan to close roughly 10pc of its UK store estate "is not enough and New Look must continue to rationalise its remaining oversized store network given it is a huge encumbrance for the retailer".
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