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High street fast fashion chain New Look is reported to be considering a 10 percent reduction of its home market’s physical network, as its financial issues deepen.

Sources close to the matter quoted by Sky News explained that if the reported plan went ahead, it would mean about a 10 percent of New Look stores shut down (60 stores) with sizeable rent reductions sought at many of the remaining branches.

New Look owns 600 stores nationwide and, according to the same sources, would be looking into entering into a Company Voluntary Arrangement (CVA). This is a legally binding process with the firm's creditors to allow a proportion of debt to be paid back over a fixed period of time. This agreement would require the consent of bondholders, while landlords and other creditors would be asked to vote on the plan later this year.

The reports come not after credit insurers were understood to have pulled their coverage against insolvency to New Look suppliers. Insurers such as Euler Hermes pulled their coverage on new shipments of products to New Look, according to the Times, while other insurers, such as QBE, have lowered the level of cover for the high street fashion retailer.

New Look has been one of the worst affected high street fashion houses, with like-for-like sales at its UK stores falling by over 8 percent in the last quarter. The company has been owned since 2015 by Brait, an investment vehicle headed by businessman Christo Wiese.