New Look linked to CVA plan and store closures

By Paul Norman - Friday, January 12, 2018 9:11

New Look is the latest well known high street name to follow the Christmas trading period with plans for store closures and rent cuts, according to reports that suggest it is weighing using a Company Voluntary Arrangement for the negotiations.

Sky News first reported last night that the fashion retailer is weighing a plan to close about 10% of its British stores.

It said the South African-owned chain is drawing up proposals for a Company Voluntary Arrangement (CVA), the process commonly used by struggling retailers to restructure financial obligations with creditors which has most recently been employed by Toys R Us and Byron Burgers.

Sky sources said New Look's CVA plan was not yet finalised and was only one of a number of options under consideration.

It said the store closures would involve roughly one-tenth of New Look's nearly 600 outlets in Britain and that significant rent reductions would be sought at many of the remaining shops.

Department store giants Debenhams and House of Frasers have also both followed tough Christmas trading periods with reports of plans to cut rents and surplus space.

Ed Cooke, Revo CEO, said: “There has been a lot of negativity, almost hysteria, about retail failures and profit warnings. Of course the market is tough, but we need a sense of perspective and even more importantly the industry has to work collaboratively on solutions to the challenges of this evolving sector, particularly business rates and Brexit. The market is often overly simplified - whether retail is either performing badly or well - but the sector, and each company situation, is complex and not binary; there are many retailers who are outperforming, and this shouldn’t be lost in the malaise.”

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