New Look announces CVA and reveals list of 60 proposed store closures
New Look has today confirmed it is instigating a Company Voluntary Arrangement (CVA) and is seeking approval from its creditors on a plan to improve the operational performance of the Company. Part of that plan includes the potential closure of 60 of its near 600 stores, including its flagship at London's Marble Arch.
The proposal also includes a reduction in rental costs and revised lease terms across 393 stores and the redundancy of a maximum of 980, from its total workforce of 15,300 people, from those stores that have been identified for potential closure.
New Look is seeking creditor approval on the proposal, which is due on 21 March. All UK stores will remain open as normal during the period of the proposal and the company’s online sales channel will be completely unaffected by the proposed changes, New Look said in a statement.
Executive chairman Alistair McGeorge, who was brought back to New Look last autumn in an attempt to revive its fortunes, 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.”
Daniel Butters and Neville Kahn of Deloitte LLP, the business advisory firm, have been appointed as Nominees to the CVA. Butters said: “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," Butters added.
The British Property Federation assistant director Stephanie Pollitt said New Look had "demonstrated best practice" in engaging with the federation early in the process.
“These situations are never easy as landlords need to take into consideration the impact on their investors, including those protecting pensioners’ savings, as they vote on the CVA proposal.
“New Look and Deloitte, however, have demonstrated best practice, constructively engaging with the BPF early in the process and ensuring landlords’ interests have been properly taken into account. Ultimately, it will be for individual landlords to decide how they will vote on the CVA, but the proposal has sought to find a solution that works for all parties,” Pollitt said.
The stores identified for potential closure are: Aberdeen - Bon Accord; Beckton; Bolton Mens; Borehamwood; Brynmawr; Burton Mens; Cameron Toll; Cardiff - Queen Arcade; Cheshunt; Clevedon; Craigleith; Doncaster Mens; Dundee – Wellgate; Exeter Mens; Fleet; Gateshead - Team Valley; Glasgow - Buchanan Street Mens; Gorleston; Hanley Mens - Intu Potteries; Hounslow Mens; Hull – Whitefriargate; Keynsham; Kingswood; Leeds - The Core Shopping Centre; Leicester – Haymarket; London - Marble Arch; London - Moorgate/ London Wall; London - Oxford Circus; Maidenhead; Maidstone Mens; Merry Hill Mens; Metro Centre – Mens; Monmouth; Newport Mens; Newton Mearns; North Shields; Nottingham Mens; Ocean Terminal; Peterbrough Bridge Street; Pontypool; Portswood; Ramsgate; Reading - Broad Street; Reading Oracle Mens; Rhyl; Romford Mens; Rugby; Shrewsbury Mens; Sidmouth; Stockport – Merseyway; Stockton-on-Tees; Stratford Upon Avon -Bridge Street; Thornaby; Tonypandy; Torquay - Union Street; Tredegar; Troon; Wallsend; Weston Favell; Wigan Mens.
