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New Look works on plan to reduce debt

Lauretta Roberts
24 December 2018

High street chain New Look is reported to be working on a plan to reduce its £1.3bn debt pile and preserve cash.

The retailer is said to be planning a debt for equity swap, whereby bondholders would be offered shares in the business, helping to reduce its debt and cut interest payments, thus keeping more cash in the business.

According to the This is Money website, the plans for the South African-owned chain, should be finalised in the first quarter of next year.

New Look, which is majority owned by Brait, is currently trading under a Company Voluntary Agreement and is reducing its store estate, cutting costs and is focused on selling more full-price product at lower prices.

When the business last reported figures for the half-year to 22 September, it said that it was beginning to see the positive results of its turnaround plan.

At the time it reported that Like-for-like sales were down -3.7% which was the second consecutive quarter of an improvement in the like-for-like sales trend. For the full financial for 2018, like-for-likes were down -8.6%.

Profit, however, was improved with EBITDA up to £49.8m (H1 FY18: £24.2m) supported by cost savings. Underlying operating profits were up at £22.2m (H1 FY18: underlying operating loss of £10.4m).

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