New Look is reportedly threatening landlords with a potential pre-pack administration as it aims to move its store estate over to turnover-based rents.
Multiple sources confirmed that New Look has hired consultancy CBRE to help move its 500 store estate to turnover-based rents, with the possibility of it falling into a pre-pack administration should those discussions not be successful, according to Retail Week.
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.
Reports indicate that talks between New Look and its landlords across across the UK have been underway throughout June.
In April, suppliers to New Look hit out at the chain after it informed them it was delaying payments “indefinitely” amid the COVID-19 pandemic.
The retailer had been trading under a CVA before the crisis hit and told suppliers that it was suspending payments to suppliers for existing stock and they were offered the opportunity to collect it.
It is the latest in a line of retailers to seek new deals, as it is anticipated that demand will remain subdued 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 earlier this month.