New Look has confirmed that creditors overwhelmingly voted in favour of its company voluntary arrangement (CVA) proposal today, which means up to 980 staff are set to be made redundant and 60 stores will shut down within 12 months time.
The CVA – which was first launched as a proposal on March 7 – was approved by 98 per cent of the fashion retailer’s creditors and landlords in a vote today. It will have a duration of three years.
The CVA approval means New Look will now go ahead plans to shut up to 60 stores it had earmarked for closure out of its existing total of 593, although final decisions on individual store closures will be made by the retailer and the stores’ respective landlords.
Of the 60 stores earmarked for closure, three are in central London – including its Oxford Circus branch. (Scroll down for full list of stores earmarked for closure)
Under the terms, the stores identified for potential closure are most likely to close within six to 12 months’ time, subject to decisions by individual landlords.
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New Look stressed that no stores will close on day one.
The company also identified a further six sites which are sub-let to third parties which could shut down.
Meanwhile, New Look’s CVA involves a requirement to make redundancies from the stores which have been identified for potential closure.
This is expected to be a maximum of 980 staff members among the current UK staff base of 15,300.
The retailer stressed that all efforts would be made to redeploy staff within the business where possible.
Finally, the CVA includes revised lease terms and rent reductions ranging between 15 per cent to 55 per cent across 393 stores.
New Look said its CVA aims to improve its operational performance by reducing its UK store estate and rental cost base amid challenged trading performance and a difficult retail environment.
Daniel Butters and Neville Kahn of Deloitte have been selected as nominees to the CVA.
“In order to help restore long-term profitability, it is clear we need to reduce our fixed cost base,” chairman Alistair McGeorge said.
“We are therefore pleased to have gained the support of our creditors to address our over-rented store estate.
“Launching a CVA has been a tough decision and our priority remains keeping all potentially affected colleagues informed during this difficult time.
“The CVA is one of a number of necessary actions we are taking to get the company back on track.
“In addition to implementing other cost-saving initiatives, we are already focusing on driving future full price sales by realigning our pricing to offer significantly better value, adding flexibility to our buying model, and improving our speed to market.
“Additionally, we have further strengthened our alignment between ecommerce and stores.
“New Look is a great brand and today represents another important step in helping to rebuild our position within the UK market.”
The news comes on the same day that it was revealed that the former New Look chief executive of five years, Anders Kristiansen, had been appointed chief executive of Espirit.
Kristiansen departed New Look last September, when the retailer’s challenging trading performance and internal upheaval was starting to unravel.
List of New Look’s UK stores that have been identified for possible closure:
- Aberdeen – Bon Accord
- Bolton (menswear store)
- Burton (menswear store)
- Cameron Toll
- Cardiff – Queen Arcade
- Doncaster (menswear store)
- Dundee – Wellgate
- Exeter (menswear store)
- Gateshead – Team Valley
- Glasgow – Buchanan Street (menswear store)
- Hanley (menswear store) – Intu Potteries
- Hounslow (menswear store)
- Hull – Whitefriargate
- Leeds – The Core Shopping Centre
- Leicester – Haymarket
- London – Marble Arch
- London – Moorgate/ London Wall
- London – Oxford Circus
- Maidstone (menswear store)
- Merry Hill (menswear store)
- Metro Centre – (menswear store)
- Newport (menswear store)
- Newton Mearns
- North Shields
- Nottingham (menswear store)
- Ocean Terminal
- Peterbrough Bridge Street
- Reading – Broad Street
- Reading Oracle (menswear store)
- Romford (menswear store)
- Shrewsbury (menswear store)
- Stockport – Merseyway
- Stratford Upon Avon -Bridge Street
- Torquay – Union Street
- Weston Favell
- Wigan (menswear store)