New Look is set to ramp up its store closure programme ahead of tax increases this April.
Around a quarter of the fashion retailer’s 364 stores nationwide are understood to be at risk when leases expire, putting some of its 8,000 workforce at risk, The Times reported.
The business has restructured its store estate twice in the last six years and has downsized its portfolio from 600 UK stores in 2018.
While some of its shops may have shuttered regardless, all of which are on relatively short leases that link rents to store turnover, the likely acceleration is thought to be a direct result of the significant cost increases revealed in October’s budget.
Some of the changes announced include the rise of employers’ National Insurance contributions from 13.8% to 15%, while the threshold has lowered from £9,100 to £5,000.
Related Story
The minimum wage is increasing 6.7% to £12.21 an hour and the retail industry’s business rates bill will rise £140m from April.
A New Look spokesperson told The Times: “Our store estate is an important part of our business, alongside our best-in-class website and app.
“We have recently invested over £3 million in our stores in Greater Manchester to trial new omni-channel initiatives to improve customer experience. Using the learnings from these trials, we are now upgrading a further 17 stores across the country.
“On occasion we do have to close stores, either due to the landlord’s request or because the site becomes unviable. However, we remain on the lookout for appropriate new opportunities across the country and continue to invest in our existing store estate.”
New Look narrowed its pre-tax loss to £21.7m for the year to 30 March, down from an £87.8m, despite sales falling 8.9% to £769.2m, which it attributed to “store closures and tough trading conditions”.
Click here to sign up to Retail Gazette‘s free daily email newsletter
