// New Look hires consultancy CBRE in an effort to move its store estate across to turnover-based rents
// The move increases the possibility of its falling into a pre-pack administration
New Look has reportedly handed its landlords an ultimatum over its store estate as it seeks turnover-based rents.
The fashion retailer has hired consultancy CBRE in an effort to move its 500-strong store estate across to turnover-based rents, which increases the possibility of its falling into a pre-pack administration should those discussions not be successful, Retail Week reported.
Should New Look launch a pre-pack administration, it would be its second financial restructuring in less than two years, following a debt-for-equity swap with stakeholders in January 2019.
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Talks between New Look and landlords have been underway for much of the month.
However, the fast fashion retailer has expressed concern that some landlords will block its move to turnover-based rents.
New Look said a pre-pack administration was one of the options the retailer was discussing, but said it was “the last thing it wants”.
“We are committed to seeking a consensual agreement with landlords to move to turnover rents, and to work in partnership with them as we continue to navigate these incredibly challenging and uncertain times together,” a New Look spokesperson told Retail Gazette.
Turnover-based rents have become increasingly popular since the Covid-19 pandemic struck the UK.
Retailers such as Frasers Group have been looking to move rents over to turnovers in the last few weeks.
Meanwhile, retailers including Debenhams, Cath Kidston and Laura Ashley have all had to appoint administrators in recent months as a result of the pandemic.
Trafford Centre-owner Intu collapsed into administration on Friday following crunch talks with its lenders.
Moreover, the likes of JD Sports, Boots and Arcadia, refused to pay March quarterly rent and also withheld the most recent quarter in June.
New Look moved onto monthly rents across much of its portfolio at its last restructuring, but did ask for rent holidays on many of its stores.
The retailer employs 12,000 people across its UK and Ireland business.
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