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New Look to close 60 stores in UK

RBR Staff Writer Published 22 March 2018

International multichannel retail brand New Look said will close 60 of its stores across the UK after creditors approved a voluntary arrangement proposal.

The company's voluntary arrangement (CVA) proposal has been approved by majority of New Look's creditors and landlords, with 98% of votes in favour of it.

The CVA, which has a duration of three years, was launched to enhance the company's operational performance by decreasing its UK store estate and rental cost base.

As per the CVA terms, the company said it has identified 60 stores out of its total 593 stores in the UK for potential closure.

An additional six sites which are sub-let to third parties will also be closed.

New Look said it will make final decisions on individual store closures with the stores’ respective landlords. The stores identified for potential closure are expected to be closed within 6 to 12 months’ time subject to decisions by individual landlords.

The CVA includes a requirement to make redundancies from the stores which have been identified for potential closure. It is expected to be a maximum of 980 staff members among the current UK staff base of 15,300.

New Look also stated that it will make all efforts to redeploy the affected people within the business, wherever possible.

The proposal also includes revised lease terms and rent reductions ranging between 15% to 55% across 393 stores.

New Look executive chairman Alistair McGeorge said: “In order to help restore long-term profitability, it is clear we need to reduce our fixed cost base. We are therefore pleased to have gained the support of our creditors to address our over-rented store estate. Launching a CVA has been a tough decision and our priority remains keeping all potentially affected colleagues informed during this difficult time.”

The company stated that the CVA is one of the several necessary actions that is taking to get itself back on track. Apart from implementing cost saving initiatives, the company is also focused on driving future full price sales by realigning its pricing to offer significantly better value, adding flexibility to its buying model and to improve its speed to market.

Additionally, the company stated that it has further strengthened its alignment between ecommerce and stores.

Image:New Look to close down more than 60 stores. Photo: Courtesy of photostock/FreeDigitalPhotos.net.