New Look has begun crunch talks with landlords as it prepares to open its stores after the COVID-19 lockdown.
The young fashion retailer has appointed the property agents CBRE and CWM and asked them to negotiate turnover-based deals at the majority of its 500-strong stores in the UK and Ireland.
It is the latest in a line of retailers to seek such deals, whereby rent is calculated on the sales of a particular store, as it is anticipated that demand will remain subdued once lockdown lifts due to social distancing measures and a slump in consumer confidence.
The retailer confirmed it was in talks but declined to give further details. “As we look towards beginning to safely reopen stores, we can confirm we are in discussions with landlords regarding rental arrangements which fairly reflect the retail operating environment,” it said in a statement to Sky News.
This latest round of negotiations come after New Look requested a three-month rent holiday in March due to the COVID-19 criss and come ahead of the next quarterly rent day, which is due at the end of June.
New Look has already cancelled forward orders with its factories and has suspended payments to suppliers indefinitely.
The business underwent a financial restructuring last year and said it had entered the COVID-19 crisis with strengthened liquidity, however industry sources suggest it is one of the brands in the sights of fast fashion online group Boohoo, which is looking to pick up additional names to add to its line-up having raised £200m for acquisitions from a share placing.
Boohoo believes the crisis will provide it with plenty of opportunity but it is unlikely to want the stores of any brand it does buy, having converted Coast and Karen Millen, which it acquired last year, into online-only propositions.