// New Look faces a court challenge by landlords over its proposed restructuring plans
// The CVA helped switch its stores to turnover-based rent last year
// Landlords said the switch to turnover rent “fundamentally rewrites” leasing agreements
New Look has reportedly entered a High Court battle with landlords British Land and Land Securities over its proposed restructuring plans.
The fashion retailer has been challenged by four landlords over its CVA, which helped switch its stores to turnover-based rent last year.
Under its terms, property owners must accept no rent for three years on 68 stores and as little as two per cent of turnover on 402 others.
Landlords have said that a “bare minimum market rent” should be paid, but would not be under the terms of the restructuring, The Times reported.
They said the switch to turnover rent “fundamentally rewrites” leasing agreements, and switch to payment in arrears is “unfair”.
Separately, New Look completed a major restructuring of its finances in November to reduce its costs after sales were hit by the Covid-19 pandemic.
The fashion retailer confirmed that in light of the High Court’s sanction of New Look Financing PLC’s Scheme of Arrangement, it has completed its comprehensive financial recapitalisation transaction.
New Look said the recapitalisation would significantly reduce long-term debt and provide financial strength and flexibility to deliver a sustainable trading platform and to execute on its strategy.