Yet another high street retailer has announced it is struggling to keep its head above water resulting in 980 jobs being put at risk with clothes retailer New Look revealing plans to shut 60 stores as part of its rescue plan.
The company hope the closure of under-performing stores, including six further sub-let sites, and rent reductions and revised lease terms which it is seeking at another 393 of its 593 stores will mprove the operational performance of the company .
The South African-owned retailer wants to enter into a company voluntary arrangement (CVA), which will keep the business trading but allow it to negotiate out of existing contracts.
The move requires approval from landlords and other creditors, but discussions have been taking place for some time.
Just last month it had revealed a nine month pre-tax loss of £123.5m – with like-for-like sales in the UK down almost 11% as shoppers’ budgets came under pressure from wage growth failing to keep pace with Brexit-linked inflation.
The three East Midlands stores under threat are: Burton Mens, Leicester – Haymarket, and Nottingham Mens.
New Look is being led by Alistair McGeorge who became executive chairman in November, a job he had previously held for two years from 2011.
McGeorge 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.”
Daniel Butters and Neville Kahn of Deloitte have been appointed to oversee the CVA.
Butter added: “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.
“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.”