New Look staff left worrying following store closure reports

London - New Look employees were dealt a harsh blow as a list of potential stores pegged for closure began circulating. A list of 49 New Look stores apparently up for closure or lease renegotiations has been circulating among media reports this week raising concerns for a number of New Look store staff.

At the moment it remains unclear where the document originated. The list includes a wide range of New Look stores in key shopping centres, high streets as well as retail parks, with a large number of the stores listed located in Scotland and Wales. In addition, the list also includes two of New Look's most high-profile stores on London's Oxford Street, but it does not include New Look's new flagship store located at 73-89 Oxford Street which is slated to open this spring.

List of 49 New Look stores rumoured to shut raises concerns for retailers future

New Look declined to comment on the list, as did Deloitte and CBRE, commercial services firms which are understood to be advising the high street retailers on its potential business restructure. The accuracy of the list, which first began circulating among property sources earlier this week, has been questioned as three of the stores on the list - Biggleswade, Chester Foregate and Plymstock - already closed their doors for good late last year. In addition, concerns that the list has led to unnecessary distress among New Look's current store staff in the UK have also been raised.

News of the list comes weeks after reports that New Look was aiming to reduce its UK store portfolio first emerged. The struggling fashion retailer is reportedly mulling over plans to reduce its UK store network by 10 percent (approximately 60 stores) while seeking out rent reductions on a number of its remaining leases in a bid to cut costs. New Look operates close to 600 stores across the UK but has been faced with a number of financial issues linked to declining sales, difficult trading conditions and 1.2 billion pound debt over the past few months.

New Look previously reported an underlying operating loss of 10.4 million pounds in its financial report for the 26 weeks to September 23, 2017, a vast difference to the 59.3 million pound profit reported in the same period the year before. A company voluntary arrangement (CVA) is one of the many options New Look is currently mulling over in a bid to improve its business. The fashion retailer was handed another blow earlier this month when credit insurers Euler Hermes and QBE reduced cover for suppliers amidst concerns over New Looks financial situation.

Owned by the South-African listed Brait, the private equity vehicle hed by Christo Weise, New Look is part of the retail portfolio hit by the recent Steinhoff accounting scandal. Although the fashion retailer is currently in the middle of a turnaround plan, which saw the return of former chairman Alistair McGeorge as a company consultant, New Look is understood to be a prime retail takeover candidate, after the value of its bonds collapsed.

"The retailer has faced a pincer movement of rising operating and sourcing costs against a backdrop of squeezed disposable incomes," said Richard Lim, Chief Executive at Retail Economics, economics research consultancy. "Burdened with inflexible leases, high rents, and excess properties, they are struggling to cope with the unforgiving shift towards online shopping and the emergence of the experience economy which is pushing their business model to the breaking point."

Photos: New Look SS18, courtesy of New Look