Following a review of its store portfolio fashion retailer New Look could close as many as 100 shops, according to a report in the Financial Times (FT) this morning.
New Look has 600 outlets in the UK with 100 leases set to expire in the next three years. The FT claims that 60 stores have been earmarked to close as the retailer shifts focus to online trading but all 100 shops could be lost if the retailer does not secure favourable deals with its landlords.
Christmas trading at New Look was stronger than might have been feared given the economic environment, with like-for-like sales up 3.6 per cent in the five weeks to December 31st, but with the group announcing a full-year drop in profits of £60 million last summer it still seems wise to minimise costs.
The retailer confirmed to Retail Gazette that it was looking at 60 leases which may not be renewed but insisted that the process was a re-organisation rather than a scaling back of its high street presence.
A spokesman for New Look said: “The 60 stores which we have looked at are small ones in locations where we think a larger New Look store could operate.
“This is a long process and each of the 100 leases will be judged individually, nothing has been earmarked as the FT suggests.
“As part of the review we have also identified around 30 areas where we currently do not have a store but which New Look could move into.”
When pressed on whether stores which do not get their leases renewed will be replaced by a similar number of larger stores the spokesman said it was “far too early to say”.
In July the retailer set out to streamline its head office staff numbers and perhaps signalled its change in direction by making all of its acquisitions team and a large part of its property team redundant.
Many retailers are currently investigating cutting their store portfolio as more of their business moves online, with both Mothercare and Thorntons looking to reduce their shop numbers by at least 150 in the next few years.
Waiting for store leases to expire before deciding whether to exit a location seems to be the main tactic of many retail business at present, including clothing giant Arcadia Group, in the hope of securing better deals with landlords desperate not to end up with empty units.
Retail Gazette discovered in October that Monsoon, another UK fashion retailer, was undertaking a review of its store portfolio in preparation for a reduction in its bricks and mortar presence.