New Look announces CVA with 60 stores pencilled in for closure

By Paul Norman - Wednesday, March 07, 2018 13:49

New Look has announced its expected company voluntary arrangement seeking to close 60 of its 593 stores in the UK plus a further six sites which are sub-let to third parties.

The proposal also seeks a reduction in rental costs and revised lease terms across 393 stores.

Redundancies from potential store closures are expected to affect a maximum of 980 members of New Look’s 15,300 staff in the UK.

New Look, which is owned by South Africa's Braitis seeking creditor approval on the proposal on 21 March.

All UK stores will remain open during the period of the proposal and the company’s online sales channel will be unaffected.

New Look had £1.14bn of debt at the end of March 2017 and has been under pressure from its bondholders to agree to a financial restructuring to prevent them booking significant losses.

Daniel Butters and Neville Kahn of Deloitte LLP have been appointed as nominees to the CVA. CBRE is advising on the stores portfolio.

Alistair McGeorge, executive chairman of New Look, said: “Given our challenged trading performance and over-rented UK store estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long term profitability.

“We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal. A priority for us is to keep all potentially affected colleagues informed during this difficult time.

“The retail trading environment in the UK remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels.

“New Look is an iconic brand on the high street and the CVA will provide a stable platform upon which management’s turnaround plan can be delivered. We have fully engaged with the British Property Federation and its members and their views are reflected in what we believe is a fair proposal to restructure the property obligations of the company.

“It is important to stress that no stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full.”

The stores set for 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

Will Thomas of KLM Retail reflected: "The number of closures is not as drastic as many feared it would be. Perhaps it demonstrates the strength of the underlying business and how relevant it remains for many shoppers. It also reinforces the view that this has come about as a result of excessive debt and poor decisions taken over recent years. The overriding sentiment will be hoping that business can be saved.

"The opportunity to right size the store portfolio and rebase rents does seem inequitable to the many well run and responsible retail businesses who have not taken on too much debt and are honouring their liabilities."

pnorman@costar.co.uk

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