// New Look’s operation in Poland files for bankruptcy
// 130 jobs at risk but stores to trade as normal for now
// Move is part of New Look’s plan to exit non-core markets
New Look Poland has filed for bankruptcy, marking the latest move in the British fashion retailer’s strategy to exit non-core international markets.
Earlier this week, New Look filed for bankruptcy proceedings with the district court of Warsaw, placing 130 jobs across 19 stores in the country at risk.
The fashion retailer will continue trading in Poland while awaiting the appointment of a trustee.
New Look had carried out a review of its Polish division, where it concluded that it was “unable to continue trading, and has determined to wind up its operations”.
It added that it has not achieved the necessary profitability to continue its ongoing operations on a standalone basis.
The news comes as New Look pushes on with its wide-reaching CVA scheme, which includes a restructure, hundreds of job cuts from a dramatic downsizing of its store estate both in the UK and abroad.
It has so far closed at least 85 out of a target of around 100 stores in the UK, while completely withdrawing from the Chinese and Belgian markets, where it had 120 and six stores respectively.
Earlier this month, New Look launched a sales process to seek new owners for its 30 stores in France.
New Look said it has been “reviewing its non-core international markets to ensure it is well positioned to drive strong business performance and profitable growth”. This strategic review is ongoing.
In January, the fast fashion chain launched a debt-for-equity swap, a refinancing process where majority ownership was handed to bondholders in a bid to cut debt from £1.35 billion to £350 million.
The debt-for-equity swap will eventually lead to capital raise of £150 million.
New Look said that it has so far achieved £78 million in annualised cost savings.
In its trading update for its financial year to date ending December 22, which was published in February, New Look said like-for-like brand sales fell 2.3 per cent for the period.
However, this was was a third consecutive quarter of improvement in like-for-likes and compares to the 10.7 per cent plunge recorded in the same period the year prior.
The retailer also highlighted that in the third quarter, which included a fair chunk of the crucial Christmas trading period, UK like-for-likes lifted 0.9 per cent.
Meanwhile, New Look said it had returned to profit after it underlying operating profit came in at £38.5 million, compared to an underlying operating loss of £5.1 million for the same period the year prior.