Published: 14:00, 07 March 2018 |
Updated: 14:00, 07 March 2018
Troubled fashion chain New Look has announced proposals to potentially close 60 of its stores nationally, including two in Kent, with the loss of 980 jobs.
The clothing retailer is aiming to cut a deal with its creditors as it tries to put itself on a more solid financial footing, including rent reductions and revised leases on 393 of its 593 stores.
It said it has identified 60 sites for potential closure as part of the so-called company voluntary arrangement (CVA), which would allow it to restructure some of its debts.
It could close its shop in Ramsgate and its mens outlet in Fremlin Walk in Maidstone.
The firm said it was facing a "challenged trading performance and a difficult retail environment".
All its stores will remain open as normal until its creditors vote on the proposal on March 21, which is being managed by Deloitte.
New Look executive chairman Alistair McGeorge said: “Given our challenged trading performance and over-rented UK store estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.
"We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal.
"A priority for us is to keep all potentially affected colleagues informed during this difficult time.”
"The retail trading environment in the UK remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels..." - Daniel Butters, Deloitte
New Look has about 20 stores in Kent.
It reported a pre-tax loss of £123.5 million in the 39 weeks to December 23, compared to a profit of £29.2 million in the same period the year before.
It had £1.1 billion of debt at the end of March 2017.
Daniel Butters, partner at Deloitte, said: “The retail trading environment in the UK remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels.
“New Look is an iconic brand on the high street and the CVA will provide a stable platform upon which Management’s turnaround plan can be delivered.
"It is important to stress that no stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full.”
Stephanie Pollitt, assistant director of real estate at the British Property Federation, said: “These situations are never easy as landlords need to take into consideration the impact on their investors, including those protecting pensioners’ savings, as they vote on the CVA proposal.
“New Look and Deloitte, however, have demonstrated best practice, constructively engaging with the BPF early in the process and ensuring landlords’ interests have been properly taken into account.
"Ultimately, it will be for individual landlords to decide how they will vote on the CVA, but the proposal has sought to find a solution that works for all parties.”
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