New Look has announced that it has secured the support of 98% of its creditors and landlords for its Company Voluntary Arrangement.
As part of the CVA, which will run for three years, the retailer proposes to reduce its store estate by 10% (or 60 stores) and reduce its rent agreements by between 15% to 55% across 393 stores.
Executive chairman Alistair McGeorge, who was brought back to the struggling business last autumn in an attempt to revive its fortunes, said: “In order to help restore long-term profitability, it is clear we need to reduce our fixed cost base. We are therefore pleased to have gained the support of our creditors to address our over-rented store estate. Launching a CVA has been a tough decision and our priority remains keeping all potentially affected colleagues informed during this difficult time.
“The CVA is one of a number of necessary actions we are taking to get the company back on track. In addition to implementing other cost-saving initiatives, we are already focusing on driving future full price sales by realigning our pricing to offer significantly better value, adding flexibility to our buying model, and improving our speed to market. Additionally, we have further strengthened our alignment between ecommerce and stores.
“New Look is a great brand and today represents another important step in helping to rebuild our position within the UK market.”
The final decision on the proposed store closures, which include its flagship at London’s Marble Arch, will be made by the company and its respective landlords with affected stores being closed within the next six to 12 months. As part of this process around 980 jobs will be lost from a total staff of 15,300 people.
New Look proposed the CVA – a legal arrangement which allows companies to pay back a proportion of debts to creditors over a period of time – following the publication of its nine-month results in February, which showed that overall group revenue was down -6.3% at £1.07bn and UK like-for-likes were down -10.7% in the 39 weeks to 23 December; underlying operating loss for the nine months year-to-date were £5.1m while losses before tax hit £123.5m.
Earlier today it was revealed that former New Look CEO Anders Kristiansen, who stood down last September, had taken up the CEO role at Hong Kong-listed Esprit.
The New Look 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.