New Look gets creditors' support to close 60 stores

New Look has announced that its Company Voluntary Arrangement (CVA) proposal launched on March 7, 2018 has been approved by the company’s creditors and landlords, with 98 percent of votes, which means the company will now go ahead with closure of its 60 stores making almost 980 staff members jobless.

Commenting on the development, Alistair McGeorge, Executive Chairman of New Look, said in a statement: “In order to help restore long-term profitability, it is clear we need to reduce our fixed cost base. Launching a CVA has been a tough decision and our priority remains keeping all potentially affected colleagues informed during this difficult time.”

New Look to close 60 stores leaving 980 jobless

New Look said that the company has identified 60 out of its total 593 stores in the UK for potential closure, alongside a further six sites which are sub-let to third parties and that the final decisions on individual store closures will be made by the company and the stores’ respective landlords. Under the terms, the stores identified for potential closure are most likely to close within 6 to 12 months’ time, but no stores will close on day one.

The CVA, New Look added, involves a requirement to make redundancies from the stores which have been identified for potential closure, expected to be a maximum of 980 colleagues amongst the company’s current UK staff base of 15,300 people. However, the company further added that efforts will be made to redeploy colleagues within the business where possible.

The proposal having a duration of three years also includes revised lease terms and rent reductions ranging between 15 percent to 55 percent across 393 stores. The company expects the CVA launched to improve the operational performance of the company by reducing its UK store estate and rental cost base amid challenged trading performance and a difficult retail environment to deliver material annual cost savings for the company.

Picture:Facebook/New Look