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New Look outlines new CVA proposals

Tom Shearsmith
26 August 2020

New Look has unveiled CVA proposals, as it aims to reset the leases on 402 of its UK stores to turnover-based deals.

If creditors approve the CVA, 402 leases will be set at a turnover percentage of up to 12% and the remaining 68 stores will move to nil rent.

In return, landlords are being offered improved break terms, which provide landlords with the opportunity to exit the lease if they believe they can identify an alternative tenant on better terms.

New Look CEO Nigel Oddy said that the company is launching the CVA “out of absolute necessity”.

In a statement, Oddy explained: "COVID-19 has changed the retail environment beyond recognition, accelerating the permanent structural shift in customer spend and behaviour from physical retail to online, which we have seen in recent trading.

"The proposal we have launched today would relieve the financial pressure on New Look as we navigate the post-COVID landscape, while also providing our landlords with greater flexibility over their rental arrangements and ensuring closer alignment of interests with regards to sales recovery.

"Together, the proposed CVA and the financial recapitalisation will provide the foundations for us to deliver our long-term strategic plans, safeguard over 11,200 jobs and continue to build on the brand status New Look has built over the past 50 years as one of the UK’s leading womenswear retailers."

The CVA will be voted on at a meeting on 15 September 2020. If approved, it will be the second CVA for New Look in two years. In 2018, creditors approved a CVA resulting in the closure of 60 stores.

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