Boohoo is once again reported to be eyeing up distressed young fashion chain New Look as its next acquisition target.
The Manchester online fashion group would not comment on the reports but has a war chest of cash at the ready to capitalise on any acquisition opportunities the high street crisis might deliver, having raised £200m in a share placing in May.
Rumours have been circling for a while that Boohoo was looking to add New Look to its brand line up that now includes PrettyLittleThing, NastyGal and BoohooMAN, as well as former high street brands Karen Millen, Coast, Oasis and Warehouse.
It acquired the latter two brands from restructuring firm Hilco in June after the former Kaupthing-owned chains collapsed into administration and their stores and online operations were closed.
New Look is facing a crunch CVA vote on Tuesday in which it hopes to convince its landlords to convert more than 400 of its stores to turnover-based rents and a further 68 stores to zero rents.
The company had also sounded out potential buyers to acquire the business as a going concern but last week said that while there had been some interest, no bids had been forthcoming.
Its lenders have agreed to pump £40m in cash into the business should the CVA go ahead but it is far from certain that landlords will back the deal. All CVAs required 75% approval from unsecured creditors to pass and it has been reported that at least 10 landlords have pushed back against the proposal.
The British Property Federation also criticised the proposal saying that if failed to meet its best practice guidelines and accused New Look of using the CVA process, which is designed to give distressed companies temporary financial relief, to permanently “rip up” leases.
If the deal is not voted through on Tuesday, New Look has said it will be forced to consider “less favourable” options for the business, which employs 11,000 staff.
Should Boohoo buy New Look it is highly unlikely to want any of its stores. Its last four acquisitions, Karen Millen, Coast, Oasis and Warehouse, have all been acquisitions of IP and other select assets, with the brands converted to online entities. A source told The Sunday Times that such a deal would not be “palatable” for New Look.
Boohoo is due to release the findings of an independent inquiry into practices throughout its supply chain after allegations of underpayment of staff at suppliers in Leicester. Alison Levitt QC is carrying out the report, which is due to be published this month.