New Look may be forced to put itself up for sale in refinancing process

Struggling British retailer New Look may be forced to put itself up for sale in order to complete its refinancing process.

A note to bondholders seen by the Guardian on Friday said that in order to finalise the restructure, it “may be required to launch a sale process for the group in which other interested parties could participate”.

The refinancing comes as part of New Look’s restructuring process which includes slashing its debt from 1.35 billion pounds to about 500 million pounds. In the first phase of its financial restructuring this week, bondholders approved an 80 million pound short-term injection of cash. The financial restructure was launched after sales at established New Look stores fell 5.7 percent in December.

New Look pushes forward with refinancing process

Alistair McGeorge, the executive chairman of New Look, told the Guardian that the backing of its main lenders was “a vote of confidence in our strategy, the strength of our brand and management’s ability to deliver the wider turnaround plans already being implemented.

“We look forward to continuing working with our key stakeholders to finalise and implement our planned restructuring to secure the future and long-term profitability of the company.”

The news comes amid difficult times for the UK retailer. In November, it announced that it would be shutting 85 of its stores across the country in a bid to improve its profitability, with as many as 120 at risk.

In December, New Look announced that it would be putting its ownership in the hands of its lenders after failing to repay debt which hit the 1.35 billion pounds mark. The deal would see 72 percent of the business secured by New Look’s creditors.

This month, the retailer announced that its Belgium arm was filing for insolvency and that its six Belgium stores would be closed following a review of its financial and trading positions by New Look Belgium SA (NLB).

Photo credit: FashionUnited